Majority of retail funds are seeing positive net inflows of cash

Following strong recovery in the second half of 2009, commercial property delivered a total return of +2.18% for the year (IPD Monthly Index December 2009), driven principally by capital growth of around 8% during Q4 2009 - a figure that would have been completely unexpected at the turn of the year.

Capital growth was seen in most sectors of the prime market from June 2009, with increased investor appetite boosting prime yields in most sectors, particularly in retail warehousing and central London offices. These two specific sectors have seen over 2% of yield compression in the last quarter of 2009 and the first six weeks of 2010. Retail funds managed by the majority of UK institutions are seeing positive net inflows of cash, with levels across some funds reaching relatively high percentages. Managers are very keen to avoid harming performance by having high cash weightings at to...