Cross-border European funds delivered a second year of positive returns in 2011, despite the ongoing crisis in the Eurozone.
Pan-European funds delivered an investor return of 4.1% in 2011, reflecting strong underlying direct property market returns of 6.8%, according to the IPD’s Pan-European Property Funds Index.
The return was lower than the UK Pooled Fund Index, which returned 7.1% last year. The IPD said this reflected the greater long-term stability of the pan-European funds driven by geographic diversification, a high income return of 6.5%, and low exposure to volatile markets such as the UK.
The index also reported quarterly results for the first time for a Pan-European sample. The underlying direct real estate performance for Q4 2011 was 1.7%, with an overall investor return of 0.9% at the NAV level.
A stable performance in Germany and France, which comprised nearly half of the index, supported the recovery in returns. Germany and France returned 8.4% and 7% in 2011, respectively.
The index is restricted to open-ended cross-border funds which employ a full quarterly open market valuation regime in accordance with RICS red book or similar standards. It is based on a sample of 16 open-ended funds with a total value of €11.2bn invested across Europe.
daniel.cunningham@estatesgazette.com
