‘Turbulent’ economy driving investment in real estate
A turbulent economy and ESG factors are driving an increase in demand for real estate in client investment portfolios, new research has revealed.
The study of 200 UK wealth managers, financial advisers and investment professionals was conducted by TIME Investments.
Over three quarters (77%) of respondents said they expect to allocate more to real estate over the next 12 months.
More than half (58%) said that for the average client the target allocation to real estate is 11% to 15%, while 26% said it was 6% to 10%.
When asked what is driving allocation to real assets such as real estate, the key factors were the desire to de-risk portfolios through diversification (68%), an increased focus on ESG (61%), a desire for secure income streams (45%) and defensive investment strategies (44%).
In terms of the real-estate subsectors, respondents felt industrials offered the biggest investment opportunities over the next 12 months.
This was followed by data centres and logistics, with student accommodation and supermarkets regarded as the least favourable.
TIME Investments head of real estate and fund manager Roger Skeldon said: “Our research shows that advisers and investment professionals are increasingly positive towards real estate, with allocation to the asset class set to increase over the coming quarters.
“This is being driven by factors that provide a counter to the current turbulent economic climate but also an increased focus on ESG.”
TIME Investments commissioned Pure Profile to carry out the research in September 2023.
They spoke to UK wealth managers, financial advisers, discretionary fund managers, fund selectors and investment analysts, 68% of which work for firms with £100m to £1bn of assets under management (AUM) and have clients with minimum investible assets of £200,000.
