Global Property Equity Funds Bounce Back, Outlook Still Uncertain

7 November 2012

After a challenging 2011, global property equity funds have seen a sharp rebound, says S&P Capital IQ Fund Research in its latest sector trends update. The peer-group median fund rose by 12.6 per cent in the first half of the year compared to falls of 7.8 per cent and 10.5 per cent over the same periods in 2011 and 2010 respectively.

There were mixed fortunes in European property markets in the second quarter of 2012. Ireland was the worst-performing residential market in the world; Portugal, Greece and Spain were all close behind. At the other end of the scale, the UK residential market has been buoyed up by strong demand and tight supply in London. S&P Capital IQ notes a trend of change use from office to residential in response to this demand. Germany, Switzerland and Norway all showed “muted but solid” progress in both the residential and office sectors.

S&P reports a general consensus among global property equity managers that the outlook for the sector is very uncertain. The key factors remain the pace of the US recovery across all sectors and growth in China.