Research - JANUARY 16, 2020

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Pension funds bet on long-income property

by Kali Persall

Pension funds are setting their sights on long-income property, according to new research from Alpha Real Capital, which shows that 84 percent of investors believe these types of investments will increase over the next two years. Twenty percent expect to see a dramatic increase.

Alpha Real defines long-income property as “real estate that is let on long leases where the covenant strength and/or property/income over-collateralization offer defensive value characteristics for investors.”

According to the research, low European government and corporate bond yields and an uncertain macroeconomic environment have led institutional investors to increasingly seek alternative sources of long-dated secure income, such as long-income property, to meet their liabilities.

Investors cited a list of benefits offered by the long-income property asset class, which include income security, inflation protection and attractive risk-adjusted returns.

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