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 firstname.lastname@example.org 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 ensimmäisten joukossa? Kun tilaat mediatiedotteemme, saat ne sähköpostiisi välittömästi julkaisuhetkellä. Tilauksen voit halutessasi perua milloin tahansa.
Lue lisää julkaisijalta Business Wire
Phase 3 Data on Filgotinib in Biologic-Experienced Rheumatoid Arthritis to Be Presented at 2018 ACR/ARHP Annual Meeting21.10.2018 01:30 | Tiedote
Gilead Sciences, Inc. (Nasdaq: GILD) and Galapagos NV (Euronext & NASDAQ: GLPG) today announced detailed results from the Phase 3 FINCH 2 clinical trial of filgotinib, an investigational, selective JAK1 inhibitor, in adults with moderately-to-severely active rheumatoid arthritis and prior inadequate response or intolerance to biologic agents. The data, which are being presented as a late-breaking poster at the 2018 American College of Rheumatology/Association of Rheumatology Health Professionals (ACR/ARHP) Annual Meeting in Chicago, suggest filgotinib has a potential role in addressing important unmet needs in the treatment of rheumatoid arthritis. Positive efficacy data from FINCH 2 were previously announced in September 2018. The data show statistically significant improvements in the proportion of patients achieving a range of clinical efficacy endpoints, including the proportion of patients achieving American College of Rheumatology 20 percent (ACR20, primary endpoint), 50 percent
Manchester United and True Religion Launch Denim Range19.10.2018 20:37 | Tiedote
Manchester United (NYSE:MANU) and luxury denim brand True Religion have collaborated to launch a range of premium club branded denim wear. A first for the club, the new global partnership with the iconic American denim brand will see a range of men’s & women’s co-branded styles go on sale beginning 26th October in the club’s Megastore as well as online via United Direct and truereligion.com & eu.truereligion.com. The exclusive collection features jeans, shirts and jackets, including a highly desirable limited edition denim jacket embroidered with the club’s crest. Fans will have the opportunity to win a selection of clothing from the new range by visiting www.manutd.com/truereligion. Manchester United’s Group Managing Director, Richard Arnold, comments: “True Religion is a well-known, established name in fashion, creating unique designs without compromising on quality. The range we have collaborated on includes the same attention to detail and craftsmanship that has made True Religion
Arch Insurance Announces Strategic Leadership Changes19.10.2018 16:10 | Tiedote
Arch Insurance today announced that Matt Shulman will assume the newly created role of CEO, Arch Insurance North America, effective January 1, 2019. In this role, he will lead Arch Insurance’s operations in the United States and Canada. He will report to Nicolas Papadopoulo, Chairman and CEO of Arch Worldwide Insurance Group. Mr. Shulman, who has more than 20 years of experience in the insurance industry, has been with Arch Insurance since 2009 and has served as the President and CEO of Arch Insurance Europe since 2016. “Matt brings significant U.S. and international experience to this role. Under his leadership, together with our senior team, Arch Insurance will continue to enhance our value proposition to our customers through a robust, diversified product portfolio, creative solutions and excellent service,” Mr. Papadopoulo said. Arch Insurance has also created a new organizational structure with three Chief Underwriting Officers (CUO) dedicated to specific lines of business. These
Takeda to Present Results from Phase 3 ALTA-1L Trial Highlighting Intracranial Efficacy of ALUNBRIG® (brigatinib) Versus Crizotinib in First-Line Advanced ALK+ Non-Small Cell Lung Cancer19.10.2018 15:00 | Tiedote
Takeda Pharmaceutical Company Limited (TSE: 4502) today announced that intracranial efficacy data from the Phase 3 ALTA-1L (ALK in Lung Cancer Trial of BrigAtinib in 1 st Line) trial showed improved intracranial progression-free survival (PFS) and intracranial objective response rate (ORR) with ALUNBRIG (brigatinib) compared to crizotinib among anaplastic lymphoma kinase-positive (ALK+) non-small cell lung cancer (NSCLC) patients. Data for these secondary endpoints will be presented in a poster discussion at the European Society for Medical Oncology (ESMO) 2018 Congress on Friday, October 19 at 2:00 p.m. CET in Munich, Germany. These results further support ALUNBRIG as a potential treatment for adults with ALK+ locally advanced or metastatic NSCLC who had not received a prior ALK inhibitor. ALUNBRIG is currently not approved as first-line therapy for advanced ALK+ NSCLC. “ALK+ NSCLC often spreads to the brain, so having options that can clearly demonstrate efficacy both in the brain an
Vertex Receives European CHMP Positive Opinion for KALYDECO® (ivacaftor) to Treat Patients With Cystic Fibrosis Aged 12 to <24 months With Certain Mutations in the CFTR Gene19.10.2018 14:54 | Tiedote
Vertex Pharmaceuticals (Europe) Limited today announces that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for KALYDECO® (ivacaftor) to include the treatment of people with cystic fibrosis (CF) aged 12 to <24 months who have at least one of the following nine mutations in their cystic fibrosis transmembrane conductance regulator (CFTR) gene: G551D, G1244E, G1349D, G178R, G551S, S1251N, S1255P, S549N or S549R. If the European Commission issues a favorable adoption of the EMA CHMP opinion for the extension of indication, ivacaftor will be the first and only medicine approved in Europe to treat the underlying cause of CF in patients aged 12 to <24 months, who have specific mutations in the CFTR gene. “Cystic fibrosis is a chronic, progressive disease that is present at birth, with symptoms often occurring in infancy, so early treatment is crucial to deliver the best possible outcomes for patients,” said Reshma Kewalr
Tradeshift Announces Q3 2018 Results19.10.2018 14:00 | Tiedote
Tradeshift, the leader in supply chain payments and marketplaces, today announced results from the third quarter of 2018, marking the tenth quarter in a row of successive growth and beating targets. Tradeshift’s third quarter growth stats announced today include: YoY revenue grew 400 percent (trailing 12 months) YoY new bookings grew 284 percent YoY gross merchandise volume (GMV) grew 262 percent New total contract value grew by $47M in Q3 Tradeshift’s customer roster continued strong growth this quarter adding 27 new customers, including Hertz, Shiseido, ECU, and Fortune 500 leaders in retail apparel, agriculture, engineering and construction, hospitality, travel and food delivery. Tradeshift also expanded its app ecosystem by adding a key partnership with Coface, a global credit insurer. Coface has announced a new app solution on the Tradeshift platform offering risk and business information services to help businesses make decisions by ensuring greater financial transparency between
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