Australian unlisted property funds outperformed Australian equities by more than three times in 2017, according to a joint report.
A joint report by MSCI, the Property Funds Association (PFA) and Zenith Investment Partners on the final quarter of 2017 has revealed that unlisted property funds delivered a total return of 23.4 per cent in the year leading up to 31 December 2017.
This was more than three times the total return of 7.7 per cent from Australian equities, the report pointed out.
MSCI executive director Maarten Broek said property as an asset class delivered strong returns thanks to investor demand as well as rental growth in Sydney and Melbourne’s office markets.
“Although yields have compressed over the last few years, Australian property returns still have a high income return component, relative to both other global property markets and other asset classes,” Mr Broek said.
Australian Unity head of commercial property Mark Lumby added that unlisted property was an investment that could provide “stable and consistent income” in a time when investors faced the challenge of rising bond yields and greater market volatility.
“The performance of our funds is driven not only by market conditions but also through the application of our experience and active asset management, which includes redeveloping existing assets to generate a higher income and capital growth profile for our investors,” he said.