Institutional investors are allocating more money to real estate and driving managers to rely more on outsourcing, according to a study by State Street.
Real estate managers are turning to outsourcing to help realise efficiency gains to offset cost pressure in the industry, said State Street. They believe outsourcing can also help managers provide clients with the most up-to-date technology, ensure compliance with regulation and meet institutional investors' demands for transparent reporting.
The majority of managers in the survey, 59%, have already outsourced rent collection, while 27% have outsourced fund accounting or administration.
The qualities managers value most in an outsourcing provider are flexibility and adaptability, with technological excellence also identified as a priority.
“Real estate fund managers are becoming acutely aware of the investment required to maintain cutting-edge technology platforms, to support capabilities such as analytics and reporting, and in response they are increasingly turning to service providers to access this expertise,” said Simon Burgess, vice president of real estate fund services for State Street’s Global Services business in Europe Middle East and Africa.
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