| Opportunity knocks for institutional real estate investors
It's all about 'opportunities' in this week's newsletter, kicking off with a guest article by Nick Edwards, CEO of the Audley Group, examining how the UK's pensions investment community lags someway behind the likes of the US, Australia, Japan, Canada, the Netherlands and Sweden, when it comes to allocating to real estate and other alternative investment asset classes.
UK pension funds currently allocate just 8 per cent of their assets to alternatives, writes Edwards, while the other countries in the world's seven biggest pensions markets average 26 per cent.
Tighter regulation for DC schemes compared with their DB counterparts is one factor, but as institutional attitudes to alternatives begin to change, Edwards expects real estate – and the retirement living sector in particular with its "super secure, high yielding income streams" – to benefit.
Those looking to invest in city on the up, should consider Edinburgh, according to Knight Frank's latest Wealth Report, which tips the Scottish capital as a future 'urban hotspot' thanks to its growing status as a hub of innovation, and the quality of life on offer to residents.
"Edinburgh has a great deal to offer as a place to live and work, and we only expect its attractiveness to increase in the years ahead as the city continues to develop, with a positive knock-on effect for investment in its property market," says Alasdair Steele, head of Scotland commercial at Knight Frank.
The potential for the nascent digital assets sector to disrupt property investing meanwhile, has been spotted by Crypto Asset Rating which has launched a new platform, RETAP, allowing real estate agents, brokers, and property owners to tokenise commercial or residential properties.
"RETAP will achieve our vision to redefine real estate ownership and to convert illiquid real estate assets to liquid assets through digital securities," says Pramod Attarde, Chief Executive Officer, Crypto Asset Rating, Inc.
Asia-focused investors are also backing real estate to deliver in the coming years with BlackRock's Asia Property Fund V having just closed with USD1.175 billion in commitments from a "diverse group of new and existing institutional investors across Europe, Asia and the Americas".
The performance of AXA IM Alts' real assets platform meanwhile, proves that the real estate sector is alive and kicking with EUR9.7 billion of transactions having been completed in 2020, up from EUR6.5 billion in 2019. Residential accounted for 47 per cent of that total with logistics (20 per cent) and student accommodation (7 per cent) also seeing significant activity.
And finally, with overseas summer holidays still looking less than certain this year, how about a staycation with a difference at the first BrewDog Hotel in England, which is due to open its doors in Manchester in mid-June. As well as an on-site restaurant, terrace and bar offering 28 different draught beers, residents will be able to take advantage of shower beer fridges and in-room beer taps. Cheers!
Property Funds World
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