UK property fund performance back to positive growth
Industrial, residential and student housing have helped the performance of UK-focused property funds bounce back into positive territory for the first time in close to two years, according to the latest survey from the European Association for Investors in Non-Listed Real Estate Vehicles.
INREV’s Pan-European Quarterly Fund Index for the fourth quarter of 2020, published today, shows capital growth for UK funds shifting from -0.11% in the third quarter to 0.6% in the fourth. That marks the first growth since the second quarter of 2019.
At an asset level, UK growth was 0.48%, its first positive sign since the final quarter of 2018.
Industrial, residential and student housing have helped the performance of UK-focused property funds bounce back into positive territory for the first time in close to two years, according to the latest survey from the European Association for Investors in Non-Listed Real Estate Vehicles.
INREV’s Pan-European Quarterly Fund Index for the fourth quarter of 2020, published today, shows capital growth for UK funds shifting from -0.11% in the third quarter to 0.6% in the fourth. That marks the first growth since the second quarter of 2019.
At an asset level, UK growth was 0.48%, its first positive sign since the final quarter of 2018.
INREV said the moves were largely due to strong performances in the industrial and logistics sector, as well as residential and student housing.
INREV’s analysts said the upward trajectory for UK funds was a sign of renewed confidence in the market after the Brexit trade agreement, as well as a recalibration of values. However, the lifts were not enough to take the full-year UK annual returns into positive territory, and the UK still lagged other European markets over the whole of 2020.
Germany topped INREV’s single-country strategy leader board, with a fourth-quarter total return of 2.94% in the fund index and 4.27% in the asset-level index.
Iryna Pylypchuk, INREV’s director of research and market information, said: “Creditable performances in sectors such as industrials/logistics, residential and most living sectors, and gradually, offices, and in core markets like Germany, Netherlands and France, reinforce the picture of an asset class returning to stability, underpinned by renewed investor appetite for new opportunities. As we move into 2021, the European real estate market reveals a gradually expanding investable universe, with a large dispersion of performance and a greater choice of risk return opportunities than we saw pre-Covid.”
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