There are two main approaches to property investment. The first is to invest in bricks and mortar, mainly via funds that own and manage commercial properties directly. The second is to invest in property companies listed on the stock exchange, either in the UK or globally.
Each approach has different investment characteristics. Funds that invest in property companies will move more in line with stock markets over the short term. Equally, they may be more capital growth-focused, rather than income-focused.
'Direct' bricks and mortar funds offer greater diversification from conventional equity markets, but are also likely to be more focused on delivering a sustainable yield. However they are also less 'liquid' - meaning managers of open-ended funds may not find it so easy to sell the underlying holdings to meet investor redemptions (or to buy property when demand booms).
This is not an issue that affects closed-ended investment companies, but investor demand (or lack of it) means they can be susceptible to pronounced share price movements relative to the underlying asset value.
Property funds may specialise in high-end 'prime' property, which usually proves more defensive in an economic downturn. Alternatively, they may focus on 'secondary' property, which will be more vulnerable in a downturn but may outstrip prime property in a buoyant market.