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INREV Investor Intentions Survey 2015

Ray Adderley

INREV recently published their annual Investor Intentions Survey. This is a joint research project with ANREV and PREA, encompassing investors from North America, Europe and Asia. Ray Adderley, Chief Investment Officer, discusses the key highlights.

The survey is based on 337 responses which comprises 144 investors and 19 fund of fund managers. Half of the investors are European and the balance is split equally between the US and Asia-Pacific. The combined investor and fund of fund managers total real estate under management was reported to be €444bn. There were 174 fund manager responses.

• Average (un-weighted) real estate allocations are projected to rise from 10.8% to 11.3% over the next two years.
• Adjusting for investor size, the increase is from 7.7% to 9.0%, which leads to €43bn available to invest.
• Nearly half of investors expect to see an increase in their real estate allocations, whilst one-tenth expect to see a decrease, leaving a net balance of +35%.
• Asia-Pacific investors show a greater desire to invest outside of their domestic region, and European investors are largely targeting Asia-Pacific.
• Retail and offices in Germany, followed by offices in UK and France (ie London and Paris), are the most popular targeted European markets.
• Investors’ preferences are evenly balanced between core and value-add non-listed funds.
• As expected, the increase in investors’ European allocations is greatest for JV / club deals, as this is the preferred route for larger investors, followed by separate accounts and real estate debt.
• Non-listed real estate funds remain popular on an un-weighted basis, with this route into Europe continuing to be a natural focus for smaller investors.
• The ability to achieve target returns, and to invest capital at the planned rate, are still the principal fund manager challenges identified.
• Availability of suitable products is considered less of an issue now than through 2010-2014, as opportunities have been brought forward.

Source: INREV Investor Intentions Survey, 2015

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Ray Adderley

Ray Adderley

Global Head of Performance & Investment Process

Ray's biography