Institutional investors set to pull back on real estate investments in 2020: survey

Global institutional investors say they intend to gently reduce their average new capital commitments to real estate in 2020.

According to a new report by Institutional Real Estate Inc. and Kingsley Associates, survey respondents said they’re reducing their new spend by an average of 11 per cent this year.

Notably, the survey was conducted between Nov. 12, 2019 and Feb. 4, 2020, prior to the most drastic economic impacts of the coronavirus pandemic. Nevertheless, it reflects the late-cycle investment mood held during those months, noted a press release.

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Looking specifically at the U.S., investors said they plan to commit $70 billion in fresh capital, down from the $75 billion spent last year. However, the report added institutional investors have shown a tendency to underestimate their actual real estate spends.

Globally, survey respondents rated the U.S. as the most attractive region for new real estate dollars. They also noted positive sentiments toward Australia, Japan and northern Europe.

As for property type, investor interests remained largely the same as in 2019, with industrial. multi-family and medical-officer properties remaining top of mind.

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