ANREV: Asian funds outperform US and Europe

Last year was the first year that Asia Pacific has outperformed the US and Europe in terms of annual return, according to the trade association.

Real estate funds in Asia Pacific outgunned the US and Europe on total annual returns, said trade body ANREV’s latest fund performance index.

Funds in the region returned 10.6 percent in 2016 compared with 8.49 percent in the US and 6.54 percent in Europe, according to the Global Real Estate Fund Index (GREFI).

“Non-listed real estate funds in the region continued their strong performance in 2016, albeit slightly down on the year before,” Amélie Delaunay, director of research and professional standards at ANREV, commented.

“It was the first year Asia Pacific outperformed the US and Europe in terms of annual return and was the only region in 2016 to see an increase in capital raising activity. These returns shore up Asia Pacific’s position within a diversified investor real estate portfolio.”

Core funds, following an upward trend since 2010, saw a small drop in returns to 13.1 percent compared with 15.7 percent in 2015.

Yet, in comparison to other fund types, core funds showed the strongest performance overall in 2016. While value added funds significantly improved, recording returns of 10.1 percent, this was from the low base of 3.5 percent in 2015. Opportunistic funds produced returns of 0.4 percent in 2016 in contrast to 5.5 percent the previous year.

The GREFI shows the performance of non-listed real estate funds on a global scale using data from indices produced by European trade association INREV, ANREV and US trade body NCREIF. The Q4 2016 release is based on the performance of 479 funds with a total GAV of $616.7 billion.