Sovereign wealth funds looking for real estate



Sovereign wealth funds and central banks are looking to capitalize on post-pandemic real estate investment opportunities, after a brief decline last year.

According to IPE Real Assets, nearly three-quarters of industry respondents to an Invesco survey believe the price drop caused by the pandemic will lead to property purchases.

Participants in the survey included 141 sovereign wealth funds and 82 central banks with collective assets of $ 19 trillion.

Average real estate allocations among respondents are down to 8.3% this year, compared to 9% in 2020 and 8.7% in 2019. But around half of wealth funds plan to increase real estate activity compared to 2020 levels, and about a quarter plan to maintain last year’s level. activity.

Respondents found industrial and residential properties more attractive than office and retail buildings, which have suffered most of the economic impact of the pandemic.

Data centers were the most desirable industry based on expected returns over the next five years, respondents to the survey said. The growth of the online economy is driving the demand for data storage and the sophisticated infrastructure needed to support the modern internet ecosystem.

Leasing slowed last year, but is expected to accelerate to potentially record highs. Rents also jumped in secondary markets in the second half of 2020. [IPE] – Dennis Lynch

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