Unlisted UK funds have experienced their worst quarterly performance since the property sector entered recovery three years ago.
In the first three months of the year, unlisted funds returned 0.7%, the lowest return since Q3 2009, according to the AREF/IPD UK Property Fund Index.
Balanced funds posted the strongest performance, witha 13bp improvement in NAV during the quarter.
In contrast, specialist funds saw a 0.5% reduction in capital over the period.
However, a number of specialist funds less exposed to the riskier sectors of the market actually outperformed the balanced funds. Capital & Regional’s X-Leisure Unit Trust was the star performer, returning 4.1%, followed by Grosvenor London Office Fund at 3.9%, UBS Central London Office Value Added Fund at 3% and Cordea Savills Student Hall Fund at 2.9%.
The average specialist fund return was dragged down by several negative performances. Bottom place was taken by the APIA Regional Office Fund, with a -3.7% return, followed by the Industrial Trust at -2.4% and The Mall Fund at -2.1%.
The highest return from a balanced fund was 2.6% from Henderson UK Property Fund, while Fidelity UK Real Estate Fund 2 was the worst balanced performer, returning -2.2%.
