For property fund investors, the European market has proved itself to be a fairly level playing field over the past year. Top returns per country have hovered in the low to mid teens with the one exception of the TR Property warrants vehicle, a UK in-vestment trust, which managed to scoop 40.9% over a 12 month period, although its three year return was a considerably lower sum of 14.88%.

French fund managers had the toughest time chasing yield when the property crisis bottomed last year and the scarcity of publicly quoted property companies for funds to invest in did not really help matters. Listed property companies only make up 1% of market capitalisation, and funds must divide their assets between traditional property stocks and construction, building materials and financial interim stocks, though with a 60% exposure to property or property-related shares, funds can offer fiscal advantages by avoiding capital gains tax. The top performing fund yielded a modest 10.88% over the past 12 months. It wasn't a good market," says Corinne Blanc, portfolio manager of BNP's FF622m Nationale Immobilier SICAV fund which ranked third with returns of 6.71%.

By contrast, the Belgian property market exploded in 1997 after three years of practical standstill. Before the pick up in prices last year, not many transactions were being made, prices were static, although the offer yield was fairly attractive for certificates covering high quality buildings, and traditionally the yield on property share certificates had been below that of government bonds. In the summer of last year however, the real estate market bottomed out, investors discovered a neglected market and began investing again and the yield has now risen above those of bonds.

The $20m Ginstitutional Immobilier and Yield B SICAV fund run by Generale de Banque topped the relatively small league of Belgian funds with returns of 15.4% over the past 12 months. The fund is only one of two others of its kind in Belgium, with other property-invested vehicles taking on the shape and form of Dutch -quoted investment company, Ro-damco, the largest Belgian players being Coffinimo and Bessino, both listed on the Brussels stock exchange.

Generale's fund invests in Belgian real estate certificates and property shares which have daily quotations on the Brussels stock exchange. The fund mirrors the Belgian market of being very domestic-oriented in its investments and almost 90% of the fund's total assets are dedicated to property in Brussels. This year is viewed with confidence as the real estate market is continuing to pick up, prices are on the rise and interest rates are falling, further lessening the attraction of bonds.

In the Netherlands, the Dfl1.9bn ABN AMRO Property Securities series of funds took the top three places in the Micropal ratings, with the top performing fund investing in Europe, returning 13.89% last year. The fund takes a top-down approach to investing and mainly focuses on local operating companies, such as British Land, as opposed to international operating property companies, which are vulnerable to currency fluctuations. The portfolio is spread ac-ross property companies in the Neth-erlands, UK, France, Sweden, Norway, Germany, Switzerland, Belgium and Spain. The Netherlands property market in particular has recently experienced an upswing with the most lu-crative areas of investment for the fund being the office sector which is in the enviable situation of a large demand for premises but a very small supply.

The UK property fund market has experienced a similar situation to France with property funds only gaining approval in 1991, there following a severe recession in the property market. Also with the success of UK equities, investors have favoured stocks over the property sector.

There are currently only two authorised property unit trusts in the UK, the Norwich Property trust which returned 17.26% last year, and the Barclays Property fund which saw returns of 13.92%. The structure is not as attractive to UK pension funds as perhaps it would be to overseas investors since the ACT legislation came into force. They can also be a relatively expensive choice as the underlying dealing costs are high, some at levels of 5-6%. The Barclays fund only invests in UK commercial property with a mixed exposure to shops, industrial buildings and offices and has to date performed in line with the market.

Vehicles other than investment funds and unit trusts have persevered with the UK and French property markets. Rodamco Europe sustains a 40% weighting, with another 40% allocated to France and the remainder of assets spread across Spain, Germany, Belgium and Holland with the recent addition of Hungary last year.

Rodamco Europe has been selling Germany "hard", says Chris Bartrum, managing director, Rodamco UK. "We have made a major switch over the last two years from Germany to France and from offices in Germany to retail in France ahead of a fall in German property values which everybody has now been experiencing." The company is also currently buying shopping centres in Madrid which Bartrum refers to as "very strategic" to the company's performance.

The Dfl925m Schroders International Property Fund has seen good returns fr om France and Italy which are the only markets where you can get turnover rents which are moderate and linked to the success of the tenants, so rents don't get too high, therefore vacancies are low, so performances have been impressive. The fund is an Amsterdam-listed public company and has the fiscal advantage of not paying any Dutch corporate, capital gains or income tax providing it distributes all its income, and that the capital gain is reinvested within a certain period.

La Salle Partners is the largest proper-ty manager in the US with $24bn un-der management and while it currently runs closed end funds and limited partnerships, it is in the process of forming a US REIT which will be listed on NYSE and will acquire and manage UK properties. La Salle will also be launching a SICAV in Luxembourg this year which will invest in property shares."