News »
26. Januar 2012 
Print
Print
Non-listed real estate investors head for relative safety of northern European countries
The Nordic region and Germany top the list of preferred locations for non-listed real estate investors keen to reduce their risk in the face of turbulent economic conditions, according to INREV’s Investment Intentions Survey 2012.
Around 64% of respondents to the survey identified German retail as their preferred country/sector combination for investment (compared with 34% last year), putting it top of the list for the second year running.
Next in line was Nordic retail with 50% of investors declaring a preference for this combination (up from 25% a year ago). Nordic offices came third on the list of investor preferences.
In contrast, there was a strong rebuttal of countries such as Italy, Spain and Portugal. More than half of investors are expected to decrease their allocations to Portugal, and 42% will do the same in Spain and Italy.
Investors have also lost their appetite for the UK, which has fallen out of the top five preferred locations. In 2011, UK offices, retail and diversified funds all figured in the list of top 10 preferences. This year, however, only UK offices made the list, and this by a relatively slim margin accounting for just 6% of respondents’ preferred locations.
France has taken a knock too. The French offices market, which last year came second in the list of preferred country/sector combinations, dropped to sixth with just 12% of investors selecting it as their preferred option. However, investors expect to increase their allocations to France over the next two years.
“Investors continue to show an aversion to risk, heading for the seemingly safer havens of northern European. The current harsh economic conditions appear to be driving their decisions and there is a clear emphasis on caution. It’s hardly surprising then that we’re seeing a shift away from southern Europe, with investors no doubt heavily influenced by the Euro crisis,” said Casper Hesp, INREV Director Research and Market Information.
A question of style
Fund style preferences reflect the current mood of caution, with the majority of investors (69%) opting for core funds, strongly driven by Dutch Investors. This continues a trend in favour of lower risk/return profiles, which started two years ago in the wake of the financial crisis. Additionally, over 50% of investors expect to increase their allocations to core funds over the next two years.
Around 64% of respondents to the survey identified German retail as their preferred country/sector combination for investment (compared with 34% last year), putting it top of the list for the second year running.
Next in line was Nordic retail with 50% of investors declaring a preference for this combination (up from 25% a year ago). Nordic offices came third on the list of investor preferences.
In contrast, there was a strong rebuttal of countries such as Italy, Spain and Portugal. More than half of investors are expected to decrease their allocations to Portugal, and 42% will do the same in Spain and Italy.
Investors have also lost their appetite for the UK, which has fallen out of the top five preferred locations. In 2011, UK offices, retail and diversified funds all figured in the list of top 10 preferences. This year, however, only UK offices made the list, and this by a relatively slim margin accounting for just 6% of respondents’ preferred locations.
France has taken a knock too. The French offices market, which last year came second in the list of preferred country/sector combinations, dropped to sixth with just 12% of investors selecting it as their preferred option. However, investors expect to increase their allocations to France over the next two years.
“Investors continue to show an aversion to risk, heading for the seemingly safer havens of northern European. The current harsh economic conditions appear to be driving their decisions and there is a clear emphasis on caution. It’s hardly surprising then that we’re seeing a shift away from southern Europe, with investors no doubt heavily influenced by the Euro crisis,” said Casper Hesp, INREV Director Research and Market Information.
A question of style
Fund style preferences reflect the current mood of caution, with the majority of investors (69%) opting for core funds, strongly driven by Dutch Investors. This continues a trend in favour of lower risk/return profiles, which started two years ago in the wake of the financial crisis. Additionally, over 50% of investors expect to increase their allocations to core funds over the next two years.
