Investors reveal stable real estate allocations in 2023: Structural shift towards residential sector

Overall, institutional investors plan to maintain their allocations for real estate globally, according to the 2023 Investment Intentions Survey published by ANREV, INREV and PREA. With a narrow gap of 20 bps between current (10.2 percent) and target (10.4 percent) allocations to real estate, institutional capital looks set to maintain stickiness to the asset class during the coming year. Approximately half of all investors expect their allocation to real estate to remain unchanged, with an even split among the rest of investors to increase or decrease their allocation. This reveals relative stability in real estate allocations amid the current market uncertainty affecting real estate investors. Of note, Asia Pacific investors indicated raising real estate allocations from the current 6.3 percent to target 8.3 percent while allocations for the other regions remain relatively flat with a more subdued outlook, especially in Europe.

A key theme going into 2023 is the