IPD: Positive U.S. investment returns continue at decelerating rate (US)

The IPD U.S. Quarterly Property Index for the United States produced a total return of 2.6% in 4Q 2011, consisting of 1.4% income and 1.2% appreciation. While this marked the eighth consecutive quarter of positive performance for the sector, total returns have been decelerating since 2Q 2011 due to a slowdown in capital appreciation (2.8% in 2Q falling to 1.2% in 4Q).

Total return for the four quarters ending 4Q 2011 was 14.9 %, versus 16.8% for the four quarters ending 3Q 2011 and 19.1%% for the four quarters ending 2Q 2011.

The residential sector was the top performing sector during the fourth quarter, posting a total return of 3.7%. The residential sector's total return consisted of 2.3% appreciation and 1.3% income. The industrial sector was the second best performer, posting a total return of 3.1%. The retail and office sectors produced total returns of 2.3% and 2.1% respectively.

Unlike 3Q 2011 when coastal markets outperformed interior markets of the U.S., performance in 4Q was more eclectic. Two of the top performing markets, Boston (3.3%) and San Francisco (3.1%), were coastal cities and two, Dallas (3.2%) and Houston (3.1%), were interior cities. All 6 of the remaining top ten cities (LA, Chicago, NY, Miami, Atlanta, Washington DC) produced total returns below the benchmark's overall total return of 2.6%.

The IPD U.S. Quarterly Property Index measures $105 billion at the ownership share of properties, mainly in core open-end funds.

Source: IPD

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