Institutional investors are planning to boost their allocation to real estate from 9.5% of their overall portfolios to 10.3%, according to the latest INREV Investment Intentions Survey . INREV estimates that the 142 institutional investors polled plan to invest almost €35bn (£28.7bn) into real estate globally this year. European investors were the most optimistic about the asset class, with 48.9% saying that they planning to increase their allocation, compared with only 26.9% of North American investors. More stable economic conditions and a low correlation with bonds and equities mean that real estate is an increasingly popular choice for investors. Real estate debt remains popular, with 25.2% stating that they plan to increase their investment in this area. However, panellists speaking at the launch of the survey last night cautioned that the window of opportunity for real estate debt investment could be closing. Roger Barris , founding partner of European private equity firm Peakside Capital , said: “The lag in the real estate funds industry between the identification of an opportunity and the raising of capital is huge. The debt opportunity is already two years old, and we think that this investment story doesn’t really exist anymore.” The UK was the most popular destination for cross-border investment, with 45% of investors listing it as their preferred market. Panellists and delegates believed that the UK was one of the best markets for digging out assets with opportunities for value growth, or “snuffling for truffles”, as one put it. However, Witsard Schaper, vice president at Franklin Templeton Investments , said he was concerned that secondary and value-add property in the UK could still be a risky play: “A lot of foreign capital has come into the UK in recent years, and this competition has forced domestic investors to start looking more at secondary and opportunistic investments. “However, I worry that the occupational market has not really come back strongly enough in many parts of the UK to make this kind of investment strategy profitable.” email@example.com
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