Real estate fund outflows slow sharply in January

Slow flows

Outflows from real estate funds slowed sharply in January, according to the latest Fund Flow Index from global funds network Calastone. 

Investors sold down GBP139 million of their real estate funds, the third month in a row that outflows have slowed following the reopening of funds suspended in early 2020 as the pandemic took hold. This was also the lowest outflow since the pandemic began, excluding the months when most funds in the sector were suspended. Calastone’s index of fund flows rose to 28.3 (a reading of 50 means buys equal sells). This means sellers outgunned buyers by almost three to one, but this is a big improvement from eight to one in September and October. 

Edward Glyn, head of global markets at Calastone says: “The pandemic has increased in intensity in almost all parts of the globe. As the UK descended into a full national lockdown with no prospect of release for months to come, one might imagine that investors in property funds would have rushed for the doors. But real estate funds are more diverse than just UK city-centre shops and offices – they have assets across a range of sectors (some of which are doing very well in the pandemic, such as warehousing) and across a range of geographies. Although sentiment is still negative, the slowdown in outflows is mainly because investors who wanted to sell, but were frustrated by fund suspensions, have now largely been shaken out.”

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