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UK pooled property funds continued to lose value in the first quarter of 2008, with the IPD All Pooled Funds Index recording a fall in total returns of 4.9%. When added to declines seen in the two previous quarters, IPD noted the All Pooled funds Index total return had now been taken to -15.0% since the subprime crisis hit in August 2007.

Despite writedowns of property values in the last quarter, IPD noted UK property funds outperformed UK equities in the period, with the FTSE All-Share Index losing nearly 10% of its value in the first three months of 2008.

Looking back over the previous year, IPD said the All Pooled Funds Index, at -13.4%, continued to outperform both listed property companies and trusts, which registered value writedowns of 33.3% and 29% respectively. Over the last year, however, property has underperformed both equities and medium- to long-term gilts, which generated returns of -7.7% and 9.7% respectively over the period.

The Low Geared All Balanced Funds Index, measuring funds broadly diversified across the market and with net debt below 25% of net asset value (NAV), did somewhat better than the broader market, with a -10.9% over the year.

In the first quarter of 2008, the best performance was chalked up by the residential sector, IPD said. Overall, the quarterly performance across the market ranged from 0.6% to -17.2%. In the 12 months to March, all representatives of the residential sector turned in a positive performance although other funds yielded losses of between 1.5% and 40.1% in the same period.

'Although the downward trend of the market has decelerated, the results indicate that there may still be some distance to go until the bottom is reached,' IPD fund services head Cameron McVean said in a statement.