Returns fell for unlisted real estate funds in the second quarter, according to the latest bulletin from INREV.
Compared with the preceding quarter, total returns were down from 0.5% in the first quarter of 2012 to -0.3% in the second quarter. INREV, the European Association for Investors in Non-listed Real Estate vehicles, attributes the fall to decreased returns from multi-country funds, which were down from 0.4% to -1.1% over the period.
The association said that continental European returns are back in negative territory from 0.5% to -0.4% while among single-country funds, Italy was the worst performer in the second quarter with total returns of -0.4%, although this was up from -0.9% in the previous quarter.
Finland delivered the strongest total returns, 2.9%, although INREV points out that this is based on a small sample of seven funds.
Overall, core funds continue to outperform value-added funds. having produced total returns of -0.1% compared to -1.3%.
“What we’re seeing is probably what a lot of people might have anticipated as markets around Europe continue to be uncertain,” said Casper Hesp, INREV director of research and market information.
“The drill-down shows multi-country funds suffering largely on the back of investments in the southern European region. Highly geared funds are struggling too. Unsurprisingly, core funds continue to demonstrate their relative strength and attractiveness to investors compared with value-add funds.”
