Post Event Write-Up: Insights Unveiled – MSCI/AREF UK Property Fund Index Analysis

20 Mar 2025

On March 19, 2025, we hosted a live webinar which was attended by 80 AREF members, called Insights Unveiled, where industry experts delved into the latest trends and analysis of the MSCI/AREF UK Property Fund Index. The session provided invaluable insights into the performance drivers shaping the UK property funds market and offered an in-depth review of the 2024 index results.

The Year in Review

Tom Richardson, Fund Manager at Knight Frank Investment Management, kicked off the event by reflecting on the turbulent year of 2024, marked by global uncertainty, geopolitical conflicts, and significant economic shifts. Despite these challenges, the UK property market showed resilience, outperforming many global counterparts. While other regions, such as North America and Asia Pacific, faced declines, the UK saw a positive return in Q3 2024, with continued recovery into Q4.

Ed White, Head of UK Consultants at MSCI Real Estate, presented a detailed analysis of the index performance. He highlighted that the UK outperformed global markets, particularly North America, which saw negative returns due to struggles in the office sector. Over the long term, however, North America remains the top performer across three, five, and ten-year periods. Ed also pointed out that the MSCI/AREF UK Property Fund Index has one of the longest histories in the industry, with over 35 years of data, offering one of the most transparent and trusted views of the property market.

Capital Flows and Market Dynamics

Ed also explored the dynamics of capital flows into the UK market. While there was a noticeable increase in US investment, Middle Eastern and APAC capital slowed. He highlighted that international and domestic capital combined for a total of £70 billion in 2024, with investments spread across all sectors. The hotel sector saw a significant uptick, while retail experienced a recovery, with large shopping centre transactions such as Meadowhall and Blue Water driving volumes.

In terms of who was buying and selling, cross-border capital, particularly from North America, was the dominant buyer, while institutional sales increased, reflecting ongoing market adjustments.

Looking Ahead to 2025

Xaviere Roudeix-Crouan, Head of Research & Forecasting at Knight Frank Investment Management, shared her insights on what 2025 may hold. She discussed how the year ahead is expected to see steady growth driven by income, with limited room for yield compression. Despite a cautious economic outlook, with GDP growth projected at just 1%, the residential and industrial sectors are likely to remain strong performers. Selectivity will be key, with investors focusing on opportunities in retail warehouses, offices (selectively), and sheds, while managing risks and diversifying portfolios.

Xaviere also highlighted the rise of niche sectors such as residential and life sciences, which may see increased capital flows, and noted the challenges posed by high interest rates and inflationary pressures.

Key Takeaways

The UK property market showed resilience in 2024, with positive returns despite a volatile global environment.
Capital flows in 2024 were dominated by US investors, with significant deployment across diverse sectors, including hotels, retail, and residential.
2025 is expected to be a year of steady growth driven by income, with selective sector investments and ongoing risks related to interest rates and inflation.
The development of new sector-focused funds, particularly in residential and life sciences, may shape the future of the market.
The MSCI/AREF UK Property Fund Index, with over 35 years of data, continues to provide one of the most trusted and transparent views of the UK property market.

The webinar closed with a lively Q&A session, where experts addressed many insightful questions from the audience, covering a wide range of topics from market trends to sector-specific forecasts.

Miss the event? AREF members can log-in to view the slides, watch the recording or listen to the audio podcast by clicking the button below:

Speakers:

With many thanks to our speakers:

Fund Manager, Knight Frank Investment Management

Tom is Chair of AREF's Index Committee. Tom is a member of the Knight Frank Investment Management UK Indirect Property team with responsibility for managing various separate accounting mandates, developing new portfolio strategies, overseeing the team’s fund-research effort and sourcing secondary market opportunities. Prior to his current role, Tom worked for Aberdeen Standard Investments for five years, where he was a senior investment manager with a focus on discretionary institutional separate account mandates investing into commercial and residential property in the UK and globally via property funds. He has been in the industry since 2004 and started with Aegon Asset Management in 2018 before the Indirect Property team moved to Knight Frank Investment Management in 2025. Tom has a BA (Hons) in Politics, Economics and Social Studies from Trinity College, Dublin, an MSc in Real Estate from the University of Reading and is a member of the Royal Institute of Chartered Surveyors (RICS)

Head of UK Consultants, MSCI Real Estate

Ed leads the UK Consultant team in MSCI Real Estate and has been with MSCI for 3 years. Ed joined MSCI from Homes England where he was Head of Corporate Strategy and Development for the organisation. Prior to this Ed was part of the founding team at HCA-Investments responsible for building the Management Information Framework and Analytics platforms across debt and equity.

Ed started his career at IPD as an analyst going on to hold various positions within the UK business.

Partner - Head of Research & Forecasting, Knight Frank Investment Management

Xaviere Roudeix-Crouan has a broad range of experience having worked in the Fund Management industry for more than 20 years, covering both the UK and European real estate markets. She joined KFIM as a Partner, Head of Research and Forecasting in 2022, where she is responsible for providing a strategic framework for investment management operations. Her role combines quantitative modelling with research skills, with a strong focus on supporting high quality strategic thinking with robust and relevant insight.

Enquiries:

If you have any questions relating to this event, or the Index - please contact us at [email protected].

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