The last 12 months saw both major global listed property indices return over 25 per cent to November 2012, but most fund managers fell short of the benchmark, according to the Lonsec Global Property Securities Fund Sector Review.
The sector largely rebounded from the lows experienced during the global financial crisis, outperforming global equities by 8.6 per cent over the year and 8.7 per cent over a three-year period, Lonsec stated.
Despite this, the relative performance of funds was difficult to determine since a number of funds are benchmarked to different indices, Lonsec senior investment analyst Andrew Coutts said.
According to Lonsec, most funds were found to be defensively positioned, favouring large cap, high quality names.
"In general, larger REIT (real estate investment trust) players are thought to be better positioned from a risk perspective relative to their smaller counterparts," Coutts said.
"This is due to better access to funding at more attractive pricing — with lenders having adopted more stringent lending criteria — and the tendency for high quality property to be more resilient in periods of economic difficulty."
The review also found that with continued macro uncertainty, managers were continuing to focus on a ‘bottom up' research approach in their stock selection rather than taking large bets on particular sectors or regions.