Real estate funds flee to Germany and the Nordics

Real estate2Non-listed real estate investors are fleeing to the perceived safety of the German retail market in response to challenging market conditions, according to a survey from the European Association for Investors in Non-listed Real Estate vehicles (Inrev).

Nearly two-thirds of the investors surveyed said they favoured the German retail segment, roughly double last year's score. The sector was also popular among fund managers and fund of fund managers. The Nordic retail segment followed by the Nordic office segment were next most popular among investors.

The UK and French property markets were not as popular as last year and each moved down the rankings. The troubled south European states have also fallen out of favour. More than half of investors expect to decrease allocations to Portugal and 42% will do the same in Spain and Italy.

Investment style also reflected a cautious approach, with most investors opting for core funds, which aim to buy safe properties with predictable return profiles.

“Investors continue to show an aversion to risk, heading for the seemingly safer havens of northern Europe. The current harsh economic conditions appear to be driving their decisions and there is a clear emphasis on caution,” said Casper Hesp, INREV director research and market information.

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