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Building confidence: While nonlisted real estate is gaining appeal, new indexes are crucial to improve market transparency
Despite being in the later stage of the cycle, investors still seem bullish on real estate, as proven by the record US$193.7 billion capital raised for real estate in 2018, according to the ANREV/INREV/NCREIF Capital Raising Survey 2019.
It appears, however, high return expectations (compared with other asset classes) is not the only reason investors are still increasing allocations to real estate. Vis-à-vis bonds, real estate returns traditionally seem relatively-more attractive in low interest-rate environments, but figures from 2018 showed these returns slowed. Rather than reducing allocations, however, the recent ANREV/INREV/PREA Investment Intentions Survey 2019 highlighted real estate has remained a stable part of investors’ portfolios, with allocations averaging 10 percent — much closer to target allocations than in previous years, though this varies across investors by domicile and size. This also provides a clear sign that investors see real e