Focus on property – Italy’s institutions plan real estate allocation boost, says INREV

Italy’s institutional investors will boost their assets in real estate by about 10% from current levels over the coming three years, according to research published by the European Association for Investors in Non-listed Real Estate Vehicles.

The study, which INREV conducted in collaboration with Assoimmobiliare, found  assets would grow from 6.9% now to 7.6%, or in asset volume from €38.5bn to €49.5bn.

In its ‘Investor Universe Italy Survey 2012’, INREV said that the growing interest in indirect real estate investment by institutions meant 50% of their total allocations would be invested in property indirectly.

In terms of assets this equates to a rise from €13.2bn invested indirectly now, to €24.7bn within three years, the association said.

The survey was based on a sample group of the industry with total assets of €232.6bn, of which €29.4bn are invested in real estate.

Most of the increase for indirect investment will be allocated to non-listed real estate funds, which could see their AUM increase by €10.7bn.

According to the survey, the majority of indirect real estate investments in Italy are through non-listed property funds, at €13.2bn.

But direct investment, at about €25.2bn, is still the dominant way to allocate.

Direct real estate, including joint ventures hold €18.9bn. Non-listed real estate funds follow with a total of €10.1bn, which includes non-listed real estate funds and funds of funds.

Other forms of access to the asset class, such as shares of listed property companies, infrastructure and securitised debt, represent just €500m.

“These figures sit in the context of an overall Italian investment market, which is estimated at €560.8bn, of which €38.5bn or 6.9% is invested in real estate,” INREV said.

When looking at the non-listed real estate funds component, insurance companies are the largest investor group accounting for around 62.2% of the total.

Private pension foundations form the second largest category with 34.7%, followed by bank foundations with 2.4% and pre-existing pension funds with just 0.8%.

 

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