Global Institutional Investors’ Average Target Allocation to Real Estate Exceeds 10%, Finds Hodes Weill & Associates and Cornell University
The real estate asset class continues to experience growth in institutional capital allocations. In fact, 2017 represents an important milestone in this regard according to Hodes Weill & Associates and Cornell University’s fifth annual Institutional Real Estate Allocations Monitor. This year’s survey revealed that for the first time, global institutional investors’ average target allocation to real estate surpassed the 10% threshold.
This press release features multimedia. View the full release here: http://www.businesswire.com/news/home/20171012005325/en/
To download the full report which was published today, please visit: www.hodesweill.com/research.
The Allocations Monitor shows that the average target real estate allocation increased to 10.1% in 2017, up from 9.9% in 2016 and 8.9% in 2013—the year in which the survey was first conducted. Over the past five years, institutional portfolios have increased their exposure to real estate from 8.5% to 9.1% invested. This implies that real estate portfolios have increased by approximately $0.5 trillion in total value, through a combination of capital appreciation and new investments.
Douglas Weill, Managing Partner at Hodes Weill & Associates, said, “Real estate has proven over time to be an important portfolio diversifier, producer of stable income and hedge against inflation, which is why it’s no surprise that this strategic asset class now exceeds a target allocation of 10% in global institutional portfolios.”
Although real estate has enjoyed a steady uptick in target allocations, the report reveals the pace of target allocations is moderating. Approximately 22% of institutional investors surveyed indicated that they expect to increase their target allocations over the next 12 months, down from 30% in 2016. What’s more, the pace of increase in target allocations slowed to 20 basis points in 2017 compared to an average of 30 to 40 basis points per year since 2013.
“While exceeding the 10% threshold is a seminal moment, the steady growth in allocations to real estate that the industry has experienced over the years appears poised to decelerate in the near term. This is due primarily to waning investor confidence, a trend that we’ve seen grow increasingly stronger since we first began conducting the survey. However, we anticipate that the long term outlook for institutional capital allocations to real estate will remain positive given the asset class’ many benefits,” continued Weill.
The report notes that a bevy of factors have contributed to a significant year-over-year decline in institutional confidence in the asset class. The survey’s “Conviction Index,” which measures institutional investors’ view of real estate as an investment opportunity from a risk return standpoint, declined from 5.4 to 4.9 over the past 12 months. Institutional investors cited frothy valuations, geopolitical unrest, possible interest rate increases and global capital markets volatility as causes for concern.
Reflecting institutional investors’ decline in confidence, the report reveals that portfolios remain approximately 100 basis points under-invested relative to target allocations. While higher-returning valued-add strategies remain the strong preference for institutions, 60% of those surveyed signaled an increased appetite for defensive debt and private credit strategies.
As it relates to investment vehicles, closed-end funds are the most preferred by institutions followed by open-end funds. Moreover, 31% of institutional investors reported that environmental, social and governance (ESG) factors are influencing their investment decisions.
Worldwide, institutional real estate portfolios generated an average annual return of 8.6% in 2016, down from 11.0% in 2015. However, investment returns exceeded targeted returns by 20 basis points and remain well ahead of global return indexes for real estate. The trailing five-year average annual investment return was 10.4%. Institutions in the Asia Pacific region achieved the highest average annual return in 2016 at 9.3%, followed by the Americas at 8.7%.
Dustin Jones, Director of the Baker Program in Real Estate at Cornell University, commented: “The Allocations Monitor provides an unparalleled look into how, where and why institutions are allocating capital to real estate. It has proven to be a valuable tool for institutional investors in the development of portfolio allocation strategies and peer benchmarking of returns, and for investment managers in business planning and product development.”
The Institutional Real Estate Allocations Monitor includes research collected from 244 institutional investors in 28 countries, with total assets under management exceeding US$11.5 trillion and portfolio investments in real estate totaling approximately US$1.1 trillion.
About Hodes Weill & Associates
Hodes Weill & Associates ("Hodes Weill") is a real estate advisory boutique with a focus on the investment and funds management industry.* The firm has offices in New York, Hong Kong and London. Founded in 2009, Hodes Weill provides institutional capital raising for funds, transactions, co-investments and separate accounts; M&A, strategic and restructuring advisory services; and fairness and valuation analyses. For more information, please contact email@example.com or visit www.hodesweill.com.
*All U.S. regulated capital market and securities advisory services are provided by Hodes Weill Securities, LLC, a registered broker-dealer with the SEC, and a member of FINRA and SIPC, and internationally, by non-U.S. Hodes Weill affiliates. All investment advisory services are provided by HW Capital Advisors, LLC, a registered investment adviser with the SEC.
About Cornell’s Baker Program in Real Estate
Cornell’s Baker Program in Real Estate is home to the Masters of Professional Studies in Real Estate degree, a comprehensive, graduate-level curriculum that educates the next generation of real estate industry leaders. Cornell is also home to the Cornell Real Estate Council, an extensive network of over 1,400 real estate industry leaders, as well as the annual Cornell Real Estate Conference. For more information, please visit https://baker.realestate.cornell.edu/
ICR on behalf of Hodes Weill
Jason Chudoba, 646-277-1249
For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.
Tilaa tiedotteet sähköpostiisi
Haluatko tietää asioista jo ennen kuin ne uutisoidaan? Kun tilaat tiedotteemme tältä julkaisijalta, saat ne sähköpostiisi yhtä aikaa suomalaisen median kanssa. Tilauksen voit halutessasi perua milloin tahansa.
Lue lisää julkaisijalta Business Wire
Sunny Optics Officially Licenses ImmerVision Panomorph Lens Technology for Global Production13.12.2017 15:47 | Tiedote
ImmerVision, developer of exclusive and patented panomorph wide-angle imaging technology, is proud to announce that Sunny Optics (Zhongshan) Co., a subsidiary of Sunny Optical Technology (Group) Co. Ltd., a leading manufacturer of integrated optical components and products, has licensed panomorph lens technology for global production, and will deliver its first small form-factor panomorph high-resolution super-wide-angle lenses for smartphones and mobile devices in Q1 2018. Panomorph lens technology combines state-of-the-art optical design and advanced, optimized algorithms, including low-power dewarping, to produce high-resolution super-wide-angle images without distortion, even in low light conditions. Sunny Optical is the largest Chinese lens supplier for the most popular smartphone brands and OEM applications such as sports cameras, surveillance, 360 image capture, autom
Synacor Launches Enhancements to Zimbra Communications and Collaboration Suite13.12.2017 15:30 | Tiedote
Synacor Inc. (NASDAQ:SYNC) today announced the commercial launch of Zimbra 8.8. The easy-to-use collaboration platform comes with new user experience features such as Zimbra Drive for enterprise-level file sync and sharing and Zimbra Chat. The Network Edition features tech stack enhancements including real-time backup, ActiveSync across mobile and desktop, hierarchical storage management (HSM) that enables customers to move archival data to less expensive storage solutions, and improved delegated admin functionality. “Zimbra 8.8 is an exciting update for end users and technical decision makers,” said Marcus Teo, Vice President, Enterprise Sales & Marketing, Synacor. “Customers look to Zimbra for security, privacy and transparency through open code, extensibility, accessibility on multiple devices and deployment flexibility. This update builds on these tenets and incorporates enhancemen
GSMA Urges Members of the World Trade Organization to Prioritise and Accelerate Investment in Digital Future13.12.2017 15:00 | Tiedote
On the occasion of the 11th World Trade Organization (WTO) Ministerial Conference, GSMA Director General Mats Granryd called on government leaders to reform their regulatory frameworks in order to encourage a new wave of innovation and investment in digital infrastructure and services. Currently, 108 of the WTO's 164 members have made commitments to facilitate trade in telecoms services, such as the right to establish new telecoms companies, make foreign direct investment in existing companies and enable the cross-border transmission of telecoms services. “Today, more than 5.1 billion people – about two-thirds of the world’s population – subscribe to mobile services. With this broad reach, the mobile industry is a major driver in the global economy, expected to employ nearly 31 million people worldwide and contribute $4.2 trillion in economic value (4.9 per cent of GDP) in 2020,” said
DCS Telecom Selects LeoSat for Innovative Data Solution13.12.2017 13:03 | Tiedote
LeoSat Enterprises, which is launching a constellation of up to 108 low-earth-orbit communications satellites, has entered into an agreement with DCS Telecom, a leading telecoms provider of satellite and networking solutions in the Middle East, Africa and Asia. This press release features multimedia. View the full release here: http://www.businesswire.com/news/home/20171213005443/en/ DCS Telecom Selects LeoSat for Innovative Data Solution (Photo: Business Wire) DCS Telecom will use LeoSat to upgrade its existing satellite solutions, giving customers access to a unique low-latency network which is expected to revolutionize data connectivity. LeoSat’s system of low earth orbit communications satellites can achieve lower latency and stronger end-to-end security compared to traditional satellite and terrestrial solutions used today. This is achieved through an adv
Andersen Global Expands Presence in Germany with Addition of Thierhoff Müller & Partner13.12.2017 11:01 | Tiedote
Andersen Global is proud to announce an expanded presence in Germany as Thierhoff Müller & Partner, a tax and legal firm with offices in Leipzig and Frankfurt, combines its practice with Andersen Tax & Legal in Germany. Through its German member firms, Andersen Tax & Legal and Alegis Steuerberatungsgesellschaft mbH, Andersen Global now has more than 65 professionals focused on providing tax and legal services and business advice across five locations in Germany, including Cologne, Dusseldorf, and Merzig. “Thierhoff Müller is highly regarded in complex restructuring matters. Together with our existing legal and tax practice, we will be able to increase our service offerings for our clients,” said Stefan Kraus, Managing Partner of Andersen Tax & Legal in Germany. “We are dedicated to providing outstanding service and are adding additional competencies in tax and legal such as corporate r
Aprecia Pharmaceuticals and Cycle Pharmaceuticals Partner to Develop 3D-Printed Orphan Drugs13.12.2017 11:00 | Tiedote
Aprecia Pharmaceuticals, LLC (“Aprecia”), The 3DP Pharmaceutical Company, and Cycle Pharmaceuticals, Ltd. (“Cycle”) today announced they have signed a partnership agreement to develop and commercialize orphan drugs using three-dimensionally printed (“3DP”) technology. The planned products will deliver quality-of-life improvements versus existing, approved orphan drugs, and will achieve this by utilizing Aprecia’s proprietary 3DP ZipDose® Technology platform. ZipDose® is the only three-dimensional printing technology used in a pharmaceutical drug product approved by the U.S. Food and Drug Administration. Antonio Benedetti, CEO of Cycle commented: “Many rare disease patients do not have a treatment option at all. For those rare diseases where there is an approved pharmaceutical treatment, patients continue to be burdened by sub-optimal drug formulations. Aprecia’s
Uutishuoneessa voit lukea tiedotteitamme ja muuta julkaisemaamme materiaalia. Löydät sieltä niin yhteyshenkilöidemme tiedot kuin vapaasti julkaistavissa olevia kuvia ja videoita. Uutishuoneessa voit nähdä myös sosiaalisen median sisältöjä. Kaikki STT Infossa julkaistu materiaali on vapaasti median käytettävissä.Tutustu uutishuoneeseemme