Unlisted real estate funds in the UK returned 2.9 per cent for the three months to March, falling back compared to 4.1 per cent for the last quarter of 2013.

However, the two most recent quarters recorded the highest levels of returns for the UK unlisted funds since June 2010.

According to an IPD study of 48 funds worth a combined £33 billion (€40 billion), four delivered quarterly returns of at least 6 per cent to March last, while the majority saw returns exceeding 3 per cent. In comparison, returns for bonds and equities for the three-month period were 2.5 per cent and -1.5 per cent. Although returns in the unlisted sector fell back, the strong performance of underlying real estate was reflected in a continued rise in the annual rate of return, which hit 11.4 per cent for the 12 months to last March.