Institutional investors in European real estate continue to remain committed to increasing their allocations to the asset class, and particularly through non-listed real estate funds, despite the downturn in the market, a survey carried out by industry body INREV shows.
Over 70% of the institutional investors who responded to the survey said they intended to increase their allocation to real estate in the medium term, mainly through non-listed vehicles, but also listed property companies.
A total of 28 institutional investors and 16 fund of funds managers responded to the INREV Investor Survey on investment allocations and the poll's findings were presented at the association's Investor-Only Seminar held in Paris on September 17-18.
Investors' continuing confidence in real estate suggests that the challenging market conditions are perceived as a general phenomenon across investment markets stemming from the financial market crisis. This can also be derived from the survey results where 70% of the institutional investors indicated that the case for real estate in comparison to other asset classes had remained the same over the past year, while 20% even felt that the case for real estate had improved.
"I think this indicates that the long-term trend of increasing institutional allocations to real estate is still intact despite the impact of the credit crunch, although the survey also shows evidence of technical changes in investment strategy in the short term in the current difficult market," commented Marie-Claude Gleize, Director for Non-listed Real Estate Funds and Active Property Investments at French investor Caisse des D