Asia Pacific outperforms the US and EU in non-listed real estate funds

Asia Pacific outperformed the US and Europe in non-listed real estate funds with a total return of 2.58% in Q3 2016, according to the latest figures from the Global Real Estate Fund Index (GREFI), and Asian association for Investors in Non-listed Real Estate (ANREV).

Amélie Delaunay, Director of Research & Professional Standards, ANREV, commented, “Asia Pacific was the only region to see an improvement in its Q3 performance out of all the regions measured, due to the strong performance of all styles of funds. Europe’s decline in performance could be attributed to the weak performance of UK funds and the US also saw a slow down.”

The ANREV Asia Pacific All Funds Index reversed two consecutive quarters of decline to return 2.58% in Q3 2016, due to the improved performance of value added and opportunity funds in the region. The US saw a total return of 1.98%, and the EU 1.01%. The GREFI All Fund Index returned 1.59% over Q3 compared with 1.75% over the previous quarter.

Value added funds rose to 2.38% in the third quarter from 1.21% in Q2 and opportunity funds rebounded to 1.08% after a negative return of -3.21% in the second quarter of last year. Core funds in Asia Pacific were slightly down on the previous quarter but still performing well with a return of 2.98% in Q3 and outpaced the GREFI.

Australia funds continued their strong performance with 2.94%, despite a drop of 43 basis points in their rate of return due to a drop in capital growth and income return. China funds bounced back from -3.64% to return 0.11% in Q3, while Japan funds, however, fell to 1.16%, the lowest quarterly return since Q4 2013.

While the region’s open ended funds declined marginally to deliver 2.99% in Q3 2016, the performance of closed end funds recovered with a return of 1.52% after seeing -1.48% in Q2.

The ANREV Quarterly Index for Q3 includes 94 funds and covers assets with a total GAV of US$95.9 billion. Three new funds were included in the index this quarter while three others were liquidated.

The GREFI Q3 2016 includes the performance of 489 funds representing US$606.9 billion of total gross asset value; with 49% in US funds, 31% in Europe, 16% in Asia Pacific, and the remainder in global strategy funds.