In the three years to the end of September the average increase in returns for the Property Direct – UK sector was 23%. Meanwhile, the average increase across the whole spectrum of investment companies for that same period was 18%.
The AIC said the growing attraction of property for investors could be seen in the tightening of discounts from 32% at the end of September 2008 to 6.5% at the end of September this year.
Current yields in the sector are a strong pull for income seekers, it added, averaging 6.3% at the end of last month.
Unsurprisingly, the London property market has continued to outperform other regions in recent years, but fund managers in the sector said the difference could become less marked.
Richard Kirby, manager of F&C Commercial Property Trust, said: "Overseas investors have been attracted to this market, with London seen as a large, mature, transparent and liquid market.
"This out-performance is expected to persist for the next year or so, but the gap between London and the regions may narrow, particularly for City offices, given the turmoil in the financial and debt markets. Nor should prime property in regional markets be written off."
Property managers also warned investors should not count on a one-way ticket to gains from their property exposure.
Jason Baggaley, manager of Standard Life Investments Property Income, said: "Some weakness in pricing is anticipated over the next few months as more stock is brought to market and it is likely that the softer prices are accentuated for secondary assets in poorer locations.
"Despite some softening in the prices for poorer quality stock, reasonable positive total returns are expected over the next few years for investors as yields compensate for any modest capital declines."
Baggaley’s trust has posted a loss of 3.8% over three years, lagging the Property Direct sector by almost 30%.
The best performing company in the sector over three years is ISIS Property, up 50.35%, closely followed by F&C Commercial Property, which has returns of 44.31% for the period.
