Investment Property Databank (IPD) International has created a global index for property returns for the period between 2001 and 2005 property data using IPD indices from various countries including South Africa, the UK, Canada, Australia, Japan and some of the European markets. The indices have been measured in local currencies and have also been converted into common currencies, namely the US dollar, Yen, Pounds Sterling and the Euro.

The Global market measured had 48,938 property investments in total worth ?778,993. The UK accounts for 22% of the sample and the European countries  combined account for 79% of the investments. South Africa measures 4.7% of this sample which is about 60% of the local and institution owned commercial  properties. In comparison South Africa has the second highest local market coverage sharing the spot with Finland and the Netherlands (Finland and Netherlands  also have a residential component). Ireland’s local market coverage tops the list at 79%.

The results are as follows: 

 In local currencies, the average global property return was 15.5%. South Africa outperformed all global markets at 30.1% and Ireland  came second at 24.3%.  The only other country with returns over 20% was the US at 20.2%. Germany performed poorly with 0.5% property returns. South Africa  also topped the  global returns on the three and five-year annualised returns.

 When converting to the stronger currencies Canada had the highest returns followed  by the US and South Africa.
 
 Converting to the dollar currency, Canada’s return was 21.7%. South Africa was third in line at 15.6%. A few European countries including Germany, Austria,   Finland, Italy, Netherlands, Sweden, Switzerland and Portugal showed negative returns. Japan returns were also negative. The UK and Ireland and Australia   achieved single digit returns. The global return was lower at 7.5%.
 
 In pounds sterling, Canada and United States still topped the list with returns over 30%. South Africa trailed closely at 29.3%. The above-mentioned European   countries that showed negative returns in dollar terms, achieved single digit positive returns. Germany was the only exception with negative returns at -2.5%. The   UK and Ireland achieved returns around the 20% level while Australia was at 18%.
 
 In Euro terms the North American countries averaged 37.8% followed closely by South African returns at 33.2%. The UK, Ireland and Australia followed the leading   pack and the returns achieved were between 20 and 30%. Germany’s returns were a low 0.5%. Countries with single digit returns included Austria, Finland, Italy,   Spain and Sweden. In this currency the global return was stronger at 23.6%.
 
The South African market seems to have been a good diversifier to European countries and the inclusion of South African property assets in a badly performing  European fund could have off-set the weaker returns. A global property investment fund with a combination of property assets from South Africa and the Northern  American markets would have resulted in strong returns relative to spreading into other markets.