Publications

- January 1, 2013: Vol. 25, Number 1

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Far and Wide: Pension Funds and Sovereign Wealth Funds Are Set to Make Their Presence Felt in Global Property Markets

by Darren Yates

1 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 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 higher profile on the international property scene. With this in mind, this article sets out an analysis of recent trends in asset allocation and the key drivers behind the property strategies. GRACEFUL GROWTH Recent years have seen a steady increase in pension fund size and allocations to property. This is expected to continue, driven mainly by aging 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 fi

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