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LONDON-European property investment in 13 produced returns of 10.4% last year, according to a new pan-European index launched by Investment Property Databank. Real estate investment returns were up from 7.4% in 2003 and 7.3% the year before in local currency terms.

IPD is launching a Europe-wide index to meet what it sees as growing demand for clear data on investing in property, which has drawn big inflows in recent years from investors burned by the end of the dot-com boom in stocks.

“Transparency [of returns] is key to unlocking international capital investment in your market. …In 10 years’ time, there may be hundreds of pan-European funds,” Ian Cullen, director, head of systems and information systems at IPD, told a press briefing. The index is based on data covering 41% of the euro 1.017 trillion ($1.25 trillion) property investment market in Europe. Countries in the new index are Britain, Germany, France, Switzerland, Netherlands, Italy, Sweden, Finland, Denmark, Spain, Norway, Portugal and Ireland.

Data showed that retail property provided the strongest returns last year at around 15% in local currency terms. The index does not yet include returns from industrial property in part because of inadequate figures but Cullen is optimistic the sector may be included as the index develops.

But IPD cautioned investors against using the index as a benchmark for funds. The report adds that data is still being updated through broader geographic coverage and revisions to historical data.

The size of Britain’s property market is reflected in its weighting in the new index. It accounts for 35.4% followed by Germany at 18.9% and France at 11.6 %. IPD is looking into indices in the Austrian and Belgian markets.

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