Hotels and healthcare showed the best returns for 2016 with 19.5 per cent and 18.2 per cent total returns, according to the latest MSCI index launched on Thursday.
The Property Council/IPD Australian All Property Index results for 2016, were presented on Wednesday showing the hotel and healthcare sectors had delivered almost twice the total return of the retail property sector, which still showed a strong 9.5 per cent return.
"Returns in the retail property space have moderated across almost all geographies and segments but were particularly weighed down by Queensland and South Australia," MSCI vice-president Mitchell McCallum said.
Industrial lost its top position but still strongest 5 year performance. This is underpinned by warehouses.
Gearing levels among the funds that the MSCI tracks have also reduced to between 10 per cent and 15 per cent, well down on pre-GFC levels.
"Despite the falling cost of debt, investors are still very risk averse and gearing levels have been falling."
Listed securities led the the property sector, returning 15.9 per cent, including 10.1 per cent capital growth. The unlisted space returned 11.1 per cent.
"Current cycle driven by cap rate compression as a result of strong investor demand." Mr McCallum said.
