Although investor sentiment is improving from last year, conditions in the asset class this year will be shaped by poor market fundamentals, continued property write-downs and expected low risk-adjusted returns. Yet despite all that, target allocations remain high and capital flows to real estate are forecast to hit $34 billion, a sizable jump from last year's meager total of $18 billion. If you have pension funds, foundations or endowments as fund raising prospects in your plan, you can't afford to be without this year's survey.
This survey is anticipated every year by the industry's most active players. It is a planning tool, which will help you shape and redefine your game plan for the upcoming year. Some things featured:
Investors expect a total rate of return of 2.8 percent for real estate, the
lowest expected return for the asset class in the survey's 14-year history.
Investors will target core properties, as well as debt investment strategies
as they emphasize a conservative approach. The percentage of new capital
targeting value-added and opportunistic investments has decreased from 67
percent in 2009 to 38 percent in 2010.
There will be plenty of capital looking for opportunities. In addition to
the projected $34 billion of new capital commitments, an estimated $135
billion of uncalled capital is currently waiting to be deployed.
This is information you need to study now so you can safely position your products to meet investor criteria.
