Unlisted real estate funds returned 3.8% in the three months to December 2014, according to the latest AREF/IPD UK Quarterly Property Fund Index, on a par with the 3.9% achieved in the third quarter of the year.
Shopping centre and retail warehouse-focused funds were the poorest performers, with seven out of eight funds returning less than 20%, compared with a spread of 19.1% to 30% for industrial funds and 21% to 42% for central London office funds.
Phil Tily, executive director of MSCI, which compiles the index, said: “Balanced funds performed strongly throughout 2014, showing a total return spread of between 11.4% and 24.2% over the course of the year.
“Long-income, low-risk funds returned a more modest 9.9%, which is not surprising given the nature of the current rising market.”
The AREF/IPD UK Quarterly Property Fund Index, sponsored by the Association of Real Estate Funds and PropertyMatch, comprises 25 balanced, 19 specialist and four long-income quarterly-valued funds, with a combined net asset value of £38.5bn at the end of Q4 2014.
