New research with 200 UK wealth managers, financial advisers, and investment professionals with clients with over £200,000 of investible assets conducted by TIME Investments, which specialises in asset-backed income-producing funds, highlights the expected increase in demand for real estate in client investment portfolios.
Over three quarters (77%) of respondents expect to allocate more to real estate over the next 12 months. More than half (58%) of respondents said that for the average client the target allocation to real estate is 11-15%, and 26% said 6%-10%.
When asked what is driving allocation to real assets such as real estate, the key factor cited by respondents is the desire to de-risk portfolios through diversification (68%), increased focus on ESG (61%), a desire for secure income streams (45%), and defensive investment strategies (44%).
OPPORTUNITIES
In terms of the real estate subsectors respondents felt industrials offered the biggest investment opportunities over the next 12 months, followed by data centres and logistics, with student accommodation and supermarkets regarded as the least favourable.
Roger Skeldon, TIME InvestmentsRoger Skeldon, Head of Real Estate and Fund Manager, says: “Our research shows that advisers and investment professionals are increasingly positive towards real estate, with allocation to the asset class set to increase over the coming quarters. This is being driven by factors which provide a counter to the current turbulent economic climate but also an increased focus on ESG.
“As real estate asset management experts, we continue to focus investment in sectors with stronger rental growth, including in our favoured ‘Beds, Meds & Sheds’ cohort, with long-term demand drivers.
“Sectors such as student accommodation continue to see a favourable supply/demand imbalance, which could allow large operators, especially with development pipelines, to continue to grow their businesses. Sectors with long-term demand drivers such as data centres have continued to attract investment and strategic partnerships to add to expansion capacity.”
