Global

Across all eight countries, returns have been squeezed by the pandemic with falls in total return being mostly driven by lower capital growth but also by lower income returns.

For the year ended September 2020, longer- and shorter-leased UK assets returned +1.5 percent and -2.5 percent, respectively.

Italian property returns slowed to 1.2 percent for the first six months of 2020 —from 3.0 percent in the second half of 2019.

Over the 10-year period to June 2020, these prime locations within the global cities all produced superior capital growth when compared to the rest of the city.

Australian property returns slowed to -2.5 percent in the second quarter of 2020—the lowest quarterly return since 2009.

Over the first six months of 2020, total returns according to the MSCI/PREA U.S. ACOE Quarterly Property Fund Index have already softened.

Global property funds’ return declined by 90 basis points to 0.6 percent in the first quarter of 2020, according to the MSCI Global Quarterly Property Funds Index.

Australian retail property registered an all-time low total return of -2.7 percent for the quarter ending March 31, 2020.

The index has now seen a full 10 years of positive total returns since the recovery from the financial crisis; however, COVID-19 has the potential to mark a turning point.

This analysis, using data from the MSCI UK Quarterly Property Index, shows lease length has historically been one such cyclical factor.

Could breaking capital growth into its components help tell a more detailed story of property portfolios’ performance?

Pan-European funds underperformed compared to U.S. funds in the years following the financial crisis and during the European Sovereign debt crisis, but that in more recent years, Pan-European fund returns have been out-performing U.S. funds.