Property fund flows

There may be a strong signal of changing sentiment in the real estate market.  The FT reports large outflows from property funds

The Investment Association said outflows from property funds, which are invested mainly in commercial buildings, reached almost £120m in February, compared with £28m in January and a reversal on sales of £150m in December 2015.

I‘m not quite sure how volatile the fund flows are.  However, at first sight it looks like a shift.

Figures for the first three months of this year put it on course to be the first quarter to register net redemptions from retail funds since the Investment Association began measuring monthly sales in 2010. Institutional investors have been net buyers of property funds in every year since 2005, apart from in 2007 and 2008.

I wonder where the redeemed cash is being deployed.   Yields from commercial real estate still look fairly good compared to bond or equity yields.


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