Best performance by non-listed property funds since 2006 - INREV

European non-listed real estate funds last year earned a record 8% total return, the best since 2006 and more than double the 3.2% in 2013, the recently-published INREV Annual Index shows.

Most of the improved performance was capital growth at 4.5%, after a 0.3% decline in 2013. Income returns remained stable at 3.5%. The UK was the big outperformer with a total return of 16.7%, nearly twice its previous year’s 8.6%. INREV said the index revealed a marked general uplift across continental Europe at 3.7% against 0.7% in 2013. Western Europe funds returned 11.2% while southern Europe improved to -1.1% against -6.7% the previous year.

Investors’ increased appetite for risk was reflected in performance figures for value added fujnd, which reached 8.9% in 2014 as against 7.9% for core funds. The best performing sector was industrial/logistics, which returned 17.9% for the period against 9.6% for retial, 7.5% for offices and 4.6% for residential.

According to INREV’s director of research Henri Vuong, “The mood is clearly upbeat. But while there’s no sign of a bubble, the consistent rise in capital values and dwindling supply of quality real estate assets across core markets in Europe may yet raise questions about the prospects for sustained outperformance over the longer term.”

The INREV Annual Index 2015 covers the performance of European non-listed real estate funds for the full year 2014 and captures data from 303 participating funds., with performance measured by INREV’s proprietary NAV calculation methodology.