Far and Wide: Pension Funds and Sovereign Wealth Funds Are Set to Make Their Presence Felt in Global Property Markets
While overall investor sentiment remains cautious, recent economic and financial conditions have allowed large investors such as pension funds and sovereign wealth funds to increase their exposure to property and, in the process, to provide much-needed equity at a time when debt finance is in short supply.
Australian and Canadian pension funds, in particular, have been increasing their allocations to real estate and are about to assume a much higher profile on the international property scene.
Recent years have seen a steady increase in pension fund size and allocations to property. This process is expected to continue in the coming years, driven mainly by ageing populations in developed countries and by the growing reliance on self-funding for retirement income. Given property’s income-producing qualities, it is expected to figure increasingly in investment portfolios.