European non-listed real estate funds posted total returns of nearly 1.4% during the first quarter of the year, according to Inrev’s latest quarterly asset level index.
This was below a total return of nearly 2% in Q4 last year. However, Inrev said the outcome reflected the third consecutive quarter of positive performance.
Capital growth reached 0.4% in Q1 this year, compared with 1.1% in Q4 2020. Inrev noted that the results indicated “a return to sustainable growth and a continuing trend of investor confidence”.
The UK recorded a total return of 1.7% at asset level, underpinned by an increase in capital growth to 0.7%.
Industrial and logistics remained the strongest performing sector across the continent, with a total return of 4.5% during Q1.
This was followed by offices, which posted a 1.1% total return. Retail delivered a -0.6% total return, with capital growth standing at -1.6%.
Total return for residential in Q1 dropped to 0.1% – down from 1.9% in the previous quarter, with Inrev citing developments in the Dutch residential market as the main driver for these declines.
Iryna Pylypchuk, director of research and market information at Inrev, said: “These results point very much toward the green shoots of recovery and a continued growth in confidence among European non-listed real estate market participants.
“That said, as the vaccination roll-out continues across Europe and we put the worst of the Covid-19 pandemic behind us, the dispersion in performance at a sector, sub-sector and geographic level is expected to stay and even accelerate in some cases.”
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