A Means to an End: The Secondary Market Gives Investors Another Chance
The global financial downturn has put a spotlight on the benefits and shortcomings of a number of investments; in particular, some traditional non-listed property fund investors were confronted with unexpected liquidity issues. As we walk down the path of recovery, institutional investors are re-evaluating the composition of their real estate allocations and investment decisions.
Over recent years, institutional investors have been increasing their allocations to real estate and have started using listed real estate as a cost-efficient, more liquid alternative for their direct real estate holdings. The fact that listed real estate investment companies hold high percentages of real estate–related assets should result in a high correlation between their returns and the development of the underlying real estate markets.
However, the securitised wrapper of these investment vehicles introduces a low-cost trading market dimension that