Balanced fund managers are investing more heavily in alternative assets such as leisure and healthcare, according to the Association of Real Estate Funds' Investment Quarterly.
The performance of pooled funds has improved over the past three months, with AREF's UK Pooled Property Funds Index showing returns of 0.4%, compared with 0.2% in Q2 2012. Balanced property funds also performed better during the quarter, returning 0.4%, up from 0.3% in Q2.
Net investments in Q3 hit £235m, a slight improvement on Q2.
AREF chief executive John Cartwright said: "Unlisted funds are still attracting capital as investors are drawn to the income streams from property investments. Managers of balanced funds are responding by reallocating capital to the alternative property segments, in particular leisure and hotels, to further boost overall income. This is already evidenced by the better total returns in these areas."