The survey also found that 27% of investors plan to increase real estate allocations over the same period.
Plans to decrease allocations varied significantly by region. European investors were the most cautious, with 37% planning to decrease allocations, compared with 20% in North American and 5% in the Asian-Pacific region.
The survey found that European investors are above the average target real estate allocation of 10.4% and the current average allocation globally of 10.2%.
Citing a "prevailing mood of caution," the survey highlighted a return to core as the preferred investment style for 2023, according to an INREV news release.
"European investors are once again the most risk averse, with 57% opting for core when investing in their region. They also have the lowest preference for opportunistic strategies, at just 8%. In Europe, the shift to core resembles the pattern seen in 2008 and 2009 — albeit, less sharp," the news release said.
The survey also suggested that Asian-Pacific investors targeting Europe reported interest in opportunistic strategies, "perhaps looking to increase their European portfolios at a discount," the release said.
In Europe, all real estate classes except public real estate and derivatives were expected to grow, with a 62% increase expected for private real estate debt, followed by a 39% net increase in joint ventures and 30% increases each in directly held real estate, separate accounts, and non-listed real estate funds, the survey found.
For investors of all sizes, the preference for private real estate debt "supports the conclusion that all investors are looking for less risky strategies, with senior debt, in particular, well placed to meet that need," the release said.
Geographically, the top picks for European investors are Germany (50%), Netherlands (44%), France and the U.K. (both 39%). By sector, office, residential and industrial/logistics real estate remained preferred sectors for investors targeting Europe.
The survey found broad consensus from investors in all regions about the potential impact from inflation, interest-rate policy and geopolitical risk, but divergent opinions on the importance of environmental, social and governance factors. More than 90% of European investors said a fund's commitment to net-zero carbon is a key consideration in real estate investment decisions, compared with nearly 70% in the Asia-Pacific region and none in North America.