Investments in real estate secondaries are well-placed for outperformance

Latest analysis from CBRE Research, in conjunction with PropertyMatch, shows investors buying in the secondary real estate fund market are well-placed to outperform those buying direct. According to the report, there are several benefits achieved by buying on the secondary market that are proven by the data analyzed to drive better performance.

The CBRE analysis shows trading via the secondary market invariably offers a cheaper entry point than the primary market, where a premium of up to 6 percent to NAV will often be paid. Analysis of CBRE’s secondary trading platform, PropertyMatch, shows investors have saved an average of 6.11 percent against the price that would have been paid on the primary market.

Additionally, investors often can deploy capital more quickly on the secondary market, receiving funding performance faster than would be the case if they entered a queue on the primary market. For a typical long income fund, for example, queues can be as long as