Bounce in UK property
UK property figures for 1999 bounced back in step with the buoyant economy returning 15.2% for the year against 12% in 1998, according to figures released by the London based Investment Property Databank (IPD).
However, pension funds may not be making the most of real-estate investment opportunities. IPD figures show a dramatic fall in the number of pension fund contributors to 23% of the universe today – compared to 31% ten years ago, which it terms a “significant erosion.”
Pension funds also provided the lowest source of new investment into property, with last year one of the lowest on record with only 1.5% of capital employed as a percentage of total fund values.
Pension fund performance in property also lagged the universe returning 14.6%.
Significantly though, the IPD report shows pension funds outperforming the universe over ten years – a phenomenon attributed to the defensive position of pension fund property portfolios during the recession in the early 1990’s.