Pan-European real estate funds generated negative investment returns for the third consecutive quarter in the first three months of 2023, according to MSCI’s Pan-European Quarterly Property Fund Index.
The funds generated a negative total return of -1.4% in the first quarter compared with the previous quarter, the index showed, as property values fell.
All-property total returns across open-end funds in the MSCI Pan-European Quarterly Property Fund Index stayed negative at -1.4% in the first quarter of 2023, although the picture did moderate after the Q4 2022 result of -6.9%.
The issues impacting European commercial property meant a third successive quarter of falling capital values, which dragged down total returns. Office and industrial account for 80% of the index by value, and both sectors recorded negative capital growth as yields continued to expand under the pressure of higher interest rates.
The Index tracks the performance of 19 open-ended cross border funds, with a Net Asset Value of EUR 50.4 billion as at March 2023.
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