Australian unlisted funds on road to recovery
Australian unlisted property funds delivered a positive 2.2 per cent total return for the March 2010 quarter, the second positive quarterly return recorded since August 2008, according to the Mercer/IPD Australian Pooled Property Fund Index (PPFI).
Over the year to March 2010, total return was minus 4.6 per cent after gearing and fees, the PPFI found. Although on an annualised basis investment performance is still posting a negative return, it is clearly displaying signs of improvement, the index said.
Returns reached a trough in the cycle around mid 2009 with annual returns averaging -13 per cent. This upturn is consistent with the early upturn identified for the direct commercial property market. Across unlisted funds the dispersion of annual returns was wide ranging, from 3 per cent to minus 20.9 per cent, with a median value of minus 6 per cent.
The Australian PPFI currently represents a basket of 13 property funds with a net asset value of $20 billion and is weighted 39 per cent and 37 per cent towards retail and commercial office, respectively. The industrial sector has a weighting of 22 per cent.
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