Capital has been flowing into open-ended UK balanced funds twice as quickly as last year, as investors gain confidence in property’s growth potential. Legal & General’s £1.3bn UK Property Unit Trust is taking in £40m-£50m of new capital per month, said L&G’s director of fund management, Michael Barrie. “Capital committed in the first half of 2014 will probably be equivalent to all of last year,” he said.
“You can see it continuing at that pace; it has been consistent for the first five months.” Philip Nell, head of European retail funds at Aviva Investors, said Aviva had been marketing real estate as an opportunity since early 2013, when valuations were still falling and there was little appetite. Speaking at the presentation of IPD’s Quarterly Index in May, he said: “With the recovery starting 12 months ago, that has changed. In the second half of 2013 Aviva Investors took in about £1bn and this year should exceed that by a long way.”