Institutions still favour existing manager relationships, although 25% said that they intend to increase the number of new manager relationships – a figure that rose for the third consecutive year. Institutional investors continued to increase their target allocations to real estate in 2018, contrary to expectations, according to Hodes Weill & Associates. “That will be interesting to watch in the coming years,” Weill said. “It will reflect where we are in the cycle, but I would be surprised to see target allocations decline.”. That’s also true for institutions based in the Americas (90 percent). Founded in 2013, the Allocations Monitor is a comprehensive annual assessment of institutions’ allocations to, and objectives Stephanie Schwartz-Driver speaks to Doug Weill about the results. The 2018 Allocations Monitor focuses on the role of real estate in institutional portfolios, and the impact of institutional allocation trends on the investment management industry. Institutions reported a further expected increase to their target allocations by an additional 20bps to 10.6% in 2019. In other geographies, although interest in value-add and opportunistic strategies is rising, the attraction of core markets has hardly waned. Read our policy. endobj Lines and paragraphs break automatically.
;^*j2p@�%*x��H9�ϼ�`ڹ&ytҖ� ?�DA�eZi�[�2$�1��Q�Rb3�ȡO!���S����K2D�[r/����o�*+;5�0��L��@����I?Z�Хxa]��H��PN�K�"gZ�5nQ��ถ*�� “Last year we predicted a slowdown in the increase in allocations, but 30bps is meaningful year over year,” said Doug Weill, managing partner of Hodes Weill & Associates, which produced the sixth annual Institutional Real Estate Allocations Monitor with Cornell University’s Baker Program in Real Estate. Launched in 2013, the 2019 Allocations Monitor is a comprehensive annual assessment of institutions' allocations to, and objectives in, real estate investments. endobj The 2019 Allocations Monitor focuses on the role of real estate in institutional portfolios, and the impact of institutional allocation trends on the investment management industry. <>12]/P 34 0 R/Pg 10 0 R/S/Link>> 2019-12-31T09:26:38-08:00
This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Value-add plays were the most popular investment vehicle for institutions in 2019, with 91 percent of institutions preferring them. “This is likely based on concerns about valuations peaking, driven in part by an influx of foreign capital in recent years into major North American real estate markets,” write the authors, because competition in core markets has pushed prices up and forced institutions into secondary markets for core properties. Rising from 8.9% of a weighted allocation in investors’ portfolio, the 2018 figure is now 10.4%, suggesting an increasing attractiveness of the real estate asset class to investors. <>stream endobj [46 0 R 48 0 R 50 0 R 51 0 R 52 0 R 53 0 R 54 0 R 55 0 R] The 10-basis-point increase is slightly smaller than in prior years. <>/Metadata 2 0 R/Outlines 5 0 R/Pages 3 0 R/StructTreeRoot 6 0 R/Type/Catalog/ViewerPreferences<>>> 2 0 obj endobj application/pdf endobj The survey, based on responses of 212 institutional investors, found that institutions increased their weighted target allocations to real estate to 10.5 percent in 2019—a 10-basis-point increase compared to last year, which translates into a dollar volume of roughly $80 billion to $120 billion of additional capital coming into the space. The difference was narrower for institutions based in the Americas, which were underinvested by 70 basis points. IPE Real Assets Top 100 Infrastructure Investors 2020 ranks new entrant LACERA 64th with $1.59bn assets, Fund manager seeking to raise £1.5bn as it prepares to fill the gap left by departing banks, Cooper named Cushman & Wakefield’s new London project management head, The G7 summit in Quebec was a picture of discord and controversy. 39 0 obj “I would expect interest in core to continue to moderate,” said Weill, “especially if interest rates continue to rise, leading to an increase in cap rates.”. Endowments and foundations, on the other hand, had the most significant reduction, with a 130bps decrease. Launched in 2013, the 2018 Allocations Monitor is a comprehensive annual assessment of institutions’ allocations to, and objectives in real estate investments. However, the authors note: “Anecdotally we have heard from investors in EMEA and Asia-Pacific that it has become increasingly harder to find attractive opportunities in the US, which has only been exacerbated by the strength of the US dollar and historically high cost of currency hedging.”. Investors are also moving away from core to more alpha-based strategies, a new trend this year, Weill said. 9 0 obj Registered Office: 1 Kentish Buildings, 125 Borough High Street, London SE1 1NP, Henderson Park snaps up €421m Lagoas business park in Lisbon, Northern Horizon seeds care home fund with €30m Danish asset, Florida SBA creates new $400m REIT mandate, LACERA commits €150m to DIF Infrastructure VI fund, Cheyne raises £500m as it targets European real estate debt dislocation, People moves: Almond joins CBRE corporate capital markets. North America remains the most popular region for investment, preferred by 92 percent of institutions, up from 91 percent in 2018. 3233596, VAT No. Launched in 2013, the 2019 Allocations Monitor is a comprehensive annual assessment of institutions’ allocations to, and objectives in, real estate investments. “Over the medium-to-long term, real estate and real assets allocations are expected to grow to the mid-teens,” Weill said, even if there is some short-term softening in target allocations. 6 0 obj Insurance companies are also the most underinvested, at 170bps. An annual report from Hodes Weill and Cornell University shows real estate remains a preferred asset class among global institutions. <>17]/P 26 0 R/Pg 9 0 R/S/Link>> The 2018 Allocations Monitor focuses on the role of real estate in institutional portfolios, and the impact of institutional allocation trends on the investment management industry. Hodes Weill and Cornell University administered the survey between May and October 2019.
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