Global real estate is set to attract about €64.6 billion ($78.9 billion) in investments this year, with European real estate set to gain the lion's share of institutional investor commitments.
The 2021 Investment Intentions survey, published Wednesday by the European Association for Investors in Non-Listed Real Estate Vehicles, the Asian Association for Investors in Non-Listed Real Estate Vehicles and the Pension Real Estate Association, said institutional investors intend to put a minimum of €55.4 billion in assets into global real estate, with funds of funds expected to invest €9.2 billion.
Last year's survey indicated that a minimum of €98.1 billion of new capital was expected to be invested in real estate globally in 2020.
Of the expected €55.4 billion institutional investor commitments, almost half, at €26.5 billion, will be committed to European real estate, €17.5 billion to North America and €9.7 billion to Asia-Pacific real estate. The remaining €1.7 billion will target Americas ex-U.S. and Africa.
Last year, Europe was expected to attract about €39.8 billion, North America was set to receive €19.4 billion and Asia-Pacific was set to bring in €28.3 billion in real estate investments. Further details were not available.
Despite the COVID-19 pandemic and its continuing impact on investors and investments, the majority of respondents said they will not alter their future investment plans.
In terms of sector preference, 84% of institutional investor respondents prefer office, industrial/logistics and residential real estate. The development sector came in fourth place in terms of preferences followed by retail real estate at 29%. The survey said retail no longer features in the top four, "as was traditionally the case in previous years." Comparative figures were not available.
The average real estate allocation globally is 9.3%, vs. an average target of 10%, the survey found. North America investors had a 10.4% actual and 11.4% target allocation to real estate — the highest in the survey findings — while European investors had an average 9% actual and 9.3% target allocation. APAC respondents' actual allocations averaged 8%, with a 9.7% target allocation.
The majority of survey respondents were based in Europe, at 51 out of a total 99. Just under a third (29) were based in North America and the remaining 19 were in Asia-Pacific.
The survey report is available to INREV members.