The capital values of assets held by funds have dipped into negative territory for the first time in two years, according to MSCI’s first-quarter IPD Pan-Europe Property Funds Index.
Funds saw a decline in asset values of 0.8% during the three months to the end of March, while overall returns remained positive across all funds at 0.4%.
The slipping values of underlying assets caused the fall in capital returns in all but balanced funds, which held overall returns above 1% for the quarter.
The figures represent a dramatic decline on the same quarter in 2015, with the 14 funds measured by MSCI sliding by 2.9 percentage points compared to Q1 2015.
However, property still outperformed the bond and equity markets over the past 12 months, posting 10.4% returns versus -10.2% for equities and 1.4% for bonds.
