IPD, world-leader in commercial real estate performance analysis services, today released the results for the 2007 IPD Italian Pooled Property Fund Indices (PPFI). The index showed a total return of 9.3% in the 12 months to December 2007. The all pooled funds composite outperformed both Bonds (2.0% return) and Italian Equities (-4.7% return), while property equities showed the weakest performance in 2007 (-45.2% return).
Returns from the Pooled Funds Indices remain consistently in line with direct property performance as measured by the IPD Italian Property Index which in the same period returned 9.2%.
"In current market circumstances, with debt both more expensive and difficult to arrange, this result is perhaps surprising given that pooled funds returns are reported after taking into account the effects both of gearing and management fees," Davide Manstretta, Head of IPD's Italian service said. "However, similar returns are also reported for the last three years performance and actually last five years annualised return for direct property (9.0%) is even higher than the all pooled funds NAV total return on the same period (8.7%)."
The seeded funds monitored by IPD have outperformed blind pool funds in the last six months (4.0% vs 1.2%), twelve months (11.1% vs 7.7%) and five years (11.2% vs 7.2%). This is mainly linked to higher gearing for seeded funds, which are also often sector specialists rather than balanced funds. The IPD Pooled Property Fund Indices measure the performance of 15 blind pool funds and 8 seeded funds.
"The IPD Italian Pooled Property Fund Indices is an important contribution to the transparency of the Italian property market. It reports for the first time the performance of Italian closed-end funds by applying methods of calculation and reporting, compliant with international standards," Manstretta commented. "As of December 2007 the IPD Italian Pooled Property Fund Index reports the performance of 23 funds and we can now measure the contribution of any asset and liability to each fund's NAV total return. IPD thanks Assogestioni1 for their contribution to the Index publication".