UK – Property was the best performing UK asset class last year with an annual return of 10.5%, says investment property data firm IPD.

“All property total return stood at 10.5% for 2002, according to the IPD Monthly Index,” IPD says on its website. “Capital values have seen a modest rise of 2.6% over the year. This has been driven by a fall in yields of 0.24 points, offsetting the 0.4% decline in rental values.”

It says: “Property was the top performing UK asset class for the third consecutive year, and is now the top performing asset class over the past 10 years.”

Property beat UK government bonds, which were only narrowly beaten to the top spot. Gilts’ strong December return pushed up their annual return to 10.3%. Equities’ annual return was -22.7%.

IPD says the end of 2002 saw no surprises as retail property remained top performer in the property sector. Retail property ended 2002 with a return of 14.0%. Industrial property returned 10.1% and offices returned 5.9%.

It says in its client newsletter that the top 10 investment managers now control up to 60% of all the assets its measures.