| | Global real estate in rude health, pre-Covid-19
The current state of play in the global real estate market may be difficult to assess right now due to the effects of the coronavirus pandemic, but the results of a survey by ANREV, INREV and NCREIF, suggest the world of property investment was in rude health pre-Covid-19.
According to the Fund Manager Survey 2020, total global real estate assets under management (AUM) hit a record EUR3.2 trillion at the end of 2019, a sizeable increase of 15.7 per cent on the previous year's total. And with the pandemic preventing a number of managers from taking part in the survey, the rate of growth – which has largely been attributed to increased investor flows and capital appreciation – could be even greater than reported.
Top of the heap in terms of AUM is the Blackstone Group with assets of nearly EUR250 billion, with the top 10 asset managers accounting for around 40 per cent of the overall total.
While older people are among those most at serious risk from coronavirus, new research from Savills this week suggests that the growing global population of retirees – predicted to rise 1.5 billion to 2.1 billion by 2050 – will drive an increase in pension fund allocations to the property sector. Savills says the deficit between retirees’ needs and pension provision, which is growing by USD28 billion every 24 hours, will hit tofive times the size of the global economy by 2050, but that the long-term secure income streams provided by real estate are increasingly being seen as a good ‘annuity match’.
Sticking with Savills, the company’s latest Market in Minutes report predicts that retail sale and leaseback (SLB) transactions will pick up where they left off post-pandemic. A total of EUR2.4 billion of SLB retail deals were transacted in 2019, accounting for 6 per cent of the overall retail investment volume, and activity is expected to increase again in the latter part of 2021 as the retail investment market as a whole starts to recover.
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