Real estate is booming. Investors are raising allocations and the investment management industry is growing and consolidating. In an investment world skewed by global monetary easing, real estate fund managers are making hay while the sun shines.

You need look no further than the world’s biggest real estate manager. Brookfield Asset Management has some €134bn in real estate assets under management, according to this year’s Top 100 ranking.

Meanwhile, the roster of companies competing to create large, diversified open-ended core funds in Europe (page 36) continues to grow. Companies have one eye on the massive core, open-ended funds market in the US, which according to latest NCREIF figures manages some $165bn (€154bn) in assets. Today, Europe’s equivalent funds manage less than €10bn between them. The entrance of Cromwell Property Group, TH Real Estate and AXA Investment Managers-Real Assets suggests the fund management industry is fairly confident it can begin bridging that gap.

A similar story is playing out in Asia Pacific with the emergence of a number of pan-regional core funds. Denmark’s PFA Pension has committed capital to open-ended funds in both regions: Cromwell’s European fund and Morgan Stanley’s Asia-Pacific vehicle.

Why the renewed momentum for this part of the market? In short, the skewed investment environment, mentioned above. Investors are desperate for yield, under-allocated to real estate and need to put money to work. Core open-ended funds offer straightforward ‘beta’ exposure to real estate markets – unlike some of the alternatives: seeking individual deals through joint ventures or separate accounts, or committing capital to private equity-style funds.

But should this latest trend be seen as a portent? As highlighted on page 36, there are 14 European open-ended funds that IPE Real Estate knows to be in the market (there are rumoured to be more waiting in the wings). But the majority in the list were set up in 2006 – two years before the global financial crisis.

The real estate asset class might be booming, but it is doing so just as risks have become greater. Property prices are at historic highs and are only attractive because of near-zero interest rates. Global growth is looking precarious and 2016 was the year that political risk went from being an academic topic to a very real one.

Brexit is not only a potential threat to the UK economy (and, by extension, its real estate markets), but also to Europe as a whole. Investors will be awaiting a series of national elections with bated breath. But the incoming US administration could be an even greater shock to the global economy. Investors are starting to grapple with the potential for Donald Trump’s economic policies to bring about a return to inflation – and higher interest rates.