Australian unlisted property fund shows signs of moderating
Australian unlisted property fund investment return remained positive in the September quarter, but demonstrated signs of moderating, according to the Mercer/IPD Australian Pooled Property Fund Index (PPFI).
Australian unlisted wholesale core property funds delivered a positive 2.2 per cent total return for the September quarter, representing a fourth straight quarter of positive returns.
However, managing director of IPD in Australia and New Zealand, Anthony De Francesco said a distribution yield of about 6 per cent suggests the sector is experiencing mild positive capital growth.
“Capital growth is likely to remain subdued over the short term which will be reflected in a moderating upswing,” said De Francesco.
PPFI also found diversified funds exhibit higher returns across funds, with gearing across the wholesale core property fund sector decreasing over the year from 23 per cent to 16 per cent.
The Australian PPFI currently represents a basket of 18 property funds with a net asset value of $35 billion.
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