The nominal returns were sharply down on the 27.5% recorded in 2007, and the lowest in six years. This performance is nevertheless the highest in the IPD indices for all countries published to date and contrasts with the pattern seen across Europe, particularly in the UK and Ireland, where capital values plummeted last year due to yield rises across all sectors. The nominal total returns for the UK and Ireland in 2008 were -22.1%, and -34.2%, respectively. In Continental Europe, the spread of performance so far ranges from -4.7% in Norway to 5.1% in Finland. In Asia Pacific, South Korea – which returned 26.7% last year – came in at 4.0%, while Australia recorded 1.8% and, in North America, Canada produced 3.7%.

Stan Garrun, Managing Director at IPD South Africa, said: “The relative resilience in SA can, in part, be ascribed to economic effects lagging the international cycle and less turbulent financial markets. We have not witnessed the rapid re-pricing of real estate that is being experienced elsewhere, certainly not on the same scale.

He continued: “Property fundamentals are still coming through quite strongly. However, it is important to bear in mind that the inflation-adjusted total returns, at 1.3%, were modest compared with the average annualized real return of 9.3% over the last 14 years.”