In our annual Institutional Real Estate Trends survey, it seems investors continue to have strong appetite for real estate investment in 2015. Investors also expect real estate to be the most attractive asset class on a risk-adjusted basis, and their satisfaction with the asset class continues to increase.
From the survey’s findings: target allocations to real estate remain flat, but investors’ real estate holdings are nearly 100 basis points below their targets. This gap to target allocations should continue to fuel capital flows to real estate in 2015.
Also, last year, we projected investors would deploy $48 billion in new capital to close a similar gap to their target allocations. Our respondents indicate that they actually put out $55 billion in new capital. Looking at 2015, we project $46 billion in new capital commitments.
The 2015 Institutional Real Estate Trends survey, conducted jointly by Institutional Real Estate, Inc. and Kingsley Associates during the fourth quarter of 2014, surveyed 62 U.S. tax-exempt and 24 foreign respondents and assessed investors’ fund allocations, risk and return assumptions, expected capital flows, and real estate investment strategies for the coming year.
For the full report, click here.
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Denise DeChaine is special projects editor and video production specialist at Institutional Real Estate, Inc.
