By Matt Ritchie
Investors in non-listed real estate funds sought the relative safety of core funds in strong performing regions last year, according to a survey from the European Association for Investors in Non-Listed Real Estate Vehicles (INREV).
The INREV Annual Index 2011 and the INREV Capital Raising Survey 2012 showed total returns from the sector fell from 7.4 per cent in 2010 to 3.7 per cent in 2011 and the level of capital raised fell by an estimated 9 per cent.
However, strong investor interest in the UK drove a solid performance in the region, as the UK performed more strongly than all European markets with the exception of France.
The UK was the most important source of capital in 2011 with investors committing €2bn. The region was also the preferred destination for investor capital, receiving 28 per cent (or €2.8bn) of the total investments.
INREV chair and managing director of global real estate at APG Asset Management Patrick Kanters said the industry was reacting to the impact of “challenging” economic conditions.
“In this context, it’s entirely appropriate for investors to apply a very considered and forensic perspective to their non-listed real estate investment strategies. We are clearly operating in an atmosphere of general prudence but this does not mean the investment industry is struggling.”