Research - SEPTEMBER 13, 2022

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Amid backdrop, investors keep moving into private markets: How and why?

by Andrea Zander

The best strategy for real estate investors is broad diversifation, both across countries and the different real estate sectors, according to UBS in its recent quarterly insights into private markets. Industrial and logistics will continue to outperform but will do so by a smaller margin. Hence, UBS favors a marginal overweight to the sector.

The correction in pricing that may occur over the coming months will likely provide opportunities for investors as well. For investors wanting to deploy capital now, holding off for a few months as pricing adjusts is probably the best strategy.

Private real estate finished the second quarter 2022 with record-setting NFI-ODCE total annual returns at 29.5 percent. Robust second-quarter returns did not fully capture the most recent activity of re-trades and value declines that are now pervasive in bidding pools. Transaction volume increased by 17 percent year-over-year, but examining the underlying data shows a decline in volum

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