There are three ways investors can earn higher returns from real estate, according to UBS.
The first is from traditional value-add and opportunistic investments that the market prices correctly and hence higher returns can only be achieved by taking on additional risk. The second is when market dislocation and stress generates opportunities to earn outsized returns relative to the risk of the investment. The third and final way is from specialist investments, which will benefit from wider trends in the economy that will cause them to deliver excess returns. Specialist investments based on asymmetric information are akin to an active strategy in the context of equities.
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