AMSTERDAM-Investors and fund managers think it unlikely that the property market will have improved by year-end, out of line with expectations at end-2008, according to the latest survey by the European real estate funds association INREV.

Despite this subdued confidence in the short term, the long-term outlook is positive, with 94% of respondents expecting the market to improve in five years' time. Investors also still consider real estate as an important part of their multi-asset portfolio. INREV CEO Lisette van Doorn said: "What we see is a difference in the rebound between the different real estate asset types. Listed real estate is already experiencing considerable capital inflows and the same applies for direct real estate. Non-listed property funds are trailing the other real estate types in the property cycle. Since the beginning of this year they have only attracted 14% of the equity committed to real estate.

"However, investors are considering commitments into non-listed property funds, as there a considerable number of new fund launches and existing fund investment opportunities in due diligence. This may indicate that investors are anticipating opportunities to emerge for non-listed funds not too far in the future."

Uncertainty about the property market, valuation issues and financing difficulties are the main reasons for investors to slow down making new investments. At the same time, fund managers are starting to see light at the end of the tunnel. Almost half of the fund managers (48%) are more confident that they are able to execute transactions at appropriate prices.

Separately, non-listed property funds are moving towards a consistent approach for reporting, with adoption levels of the INREV guidelines continuing to improve, according to another survey. The second annual Review of Reporting Best Practice shows that 81% of the 2008 annual reports surveyed have adopted the majority of the reporting guidelines, compared to 73% in 2007. The number of funds applying at least three-quarters more than doubled to 43%. The guidelines provide fund managers and institutional investors with a common set of principles and recommendations for governance and information provision.