Australian unlisted core wholesale property funds returned 2.2 per cent in the June quarter, remaining stable compared to the 2.1 per cent return posted in March, according to the Mercer/IPD Australian Pooled Property Fund Index.
This brings the total market return for the year to June to 9.8 per cent after gearing and fees.
The average distribution yield for the sector as at June also remained steady at 5.8 per cent.
Anthony De Francesco, managing director of IPD in Australia and New Zealand, said the stabilisation of the market reflects moderating space fundamentals, a softening macroeconomic climate and unfavourable market conditions.
The index, which was recently revamped, now also provides further transparency around which segments of the market are outperforming.
It found diversified funds outperformed over the year with a total return of 10.5 per cent, followed by office sector funds with 9.7 per cent, retail funds with 9.1 per cent and industrial funds posting 8.9 per cent.
It also found that as capital values increase and managers reduce exposure to debt, gearing levels across the index have declined. As at June, debt as a percentage of gross asset value stood at 14.6 per cent, down from 19.6 per cent a year ago.
