INREV: All-German Index produces 1.2% performance in Q2

The All German Vehicles Index delivered returns of 1.2% over the first quarter of 2017, according to data provided by INREV, the European Association for Investors in Non-listed Real Estate Vehicles.

On an annualised four quarters rolling return basis, performance for non-listed German vehicles was 4.0%. The income return of 3.0% was the main driver of positive performance, while capital growth contributed 1.0%.

Total returns for Spezialfonds was 2.0% over Q2 2017, up from the 1.4% delivered in Q1 2017. Publikumsfonds, which account for 63.9% of Index NAV, saw their performance slowing down from 1.0% in Q1 2017 to 0.8% in Q2 2017.

Vehicles that invest only in Germany showed a strong improvement in performance delivering 2.7% during this quarter, an increase from 2.1% in Q1 2017. Vehicles that have a European – ex Germany strategy slowed down marginally recording 1.0% in Q2 2017 from 1.1% in Q1 2017.

Within the different sectors, retail and residential sectors recorded the highest returns in Q2 2017, achieving 2.8% and 2.15 respectively. The office sector showed strong rebound from the previous quarter's sluggish performance, recording 1.7%. Industrial sector performance rose to 1.9%, up from 1.7% recorded in the previous quarter.

Meanwhile, INREV's overall European quarterly index generated a total return of 2.4% for Q2 2017 and 8.1% over the last 12 months, the organisation said.

The positive returns were bolstered by a maintained level of confidence in the UK (funds delivered 2.1%) with fears of Brexit being shaken off, a revival in French investment tripling to 2.9% (versus 1.0% in Q1 2017), and an uptick in Germany with returns totalling 2.4% compared to 2.2% in the first quarter.

According to Henri Vuong, INREV’s director of research and market information, "It is very encouraging to see such stable, positive returns across countries and sectors. These results demonstrate investors’ continuing widespread appetite for non-listed real estate as part of a balanced portfolio."

Residential was still the best performing sector during the second quarter, with a 3.7% return increasing from 3.1% in the previous quarter. Offices saw the largest uplift with a 2.1% return compared to 1.6% in Q1 2017, according to the data.

Multi-country and multi-sector funds both saw increased returns as investors continue to favour diversification. Multi-sector funds returned 2.1% versus 1.6% in Q1, and multi-country funds saw a 2.2% return compared to 1.6% the previous quarter.

The figures also displayed an improved performance in both capital growth (1.3%) and distributed income return (1.1%) at the All Funds Index level.