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S&P said its Global Property index had fallen by 19.8 per cent in the first quarter, adding many investors still feared talk of a bottom for property and Reit stocks was premature.

In the developed world, the S&P Developed Property index dropped by 22.2 per cent, with the US suffering the worst, declining by 31.7 per cent. Europe and Asia were also badly hit.

The picture for global Reit stocks was equally depressing. Once again, the US was the worst performer, with losses tied to overleveraging and weak balance sheets. High gearing, along with declining property prices, also damaged European Reits, S&P said.

But emerging markets proved resilient, with the S&P Emerging Property index returning 7.8 per cent over the period.

Israel was the most successful of the emerging market countries, with its property sector returning 33 per cent, largely due to the 140.2 per cent increase in Jerusalem Economic Corps over the quarter.

Further, Asian Reits remained attractive due to their lower financing risk and relatively simple nature, S&P said. The strongest performer was Hong Kong, with returns of almost 14 per cent.