Total property returns have dropped to their lowest quarterly level in more than a decade.
The latest data from MSCI/AREF shows that UK property fund returns declined by 1.8% in the three months ended 31 March.
The figure is the lowest quarterly total return since June 2009.
Specialist property was the biggest underperformer for the quarter, down by 6.3%. The decline was driven by a higher allocation to retail properties and higher gearing levels compared to balanced funds.
Within the retail sector, specialist funds had a 22% allocation to shopping centres versus 2% of balanced funds. Long income funds, the best-performing fund type, had both the lowest retail allocation and gearing levels.
The MSCI/AREF index tracks the performance of 46 UK pooled property funds, with a NAV of £50.8bn.
To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette
