Most German institutional investors want to increase their real estate allocations by 2017, according to a survey by Feri EuroRating Services.
The report found that, over the past four years, the share of real estate in German institutional portfolios increased by more than one-third, from 6.1% in 2010 to 8.3% in 2014.
Real estate quotas in insurance company portfolios also increased – despite incoming Solvency II rules – from a similar level to 7.6% in 2014.
One-third of the 90 institutions surveyed – with real estate investments amounting to €63bn in total – want to step up their investment activities in Germany.
The survey also highlighted an increase in core-plus investments, becoming a greater proportion of investors’ property portfolios – from 16% in 2012 to 26% last year. A small proportion (9%) of investors said they wanted to increase their exposure to core-plus assets in the future.
One-quarter of investors want to increase their exposure to residential real estate and 20% want to invest more in retail.
Only 7% want to increase their exposure to office properties. “Office on the other hand is losing in significance,” noted Wolfgang Kubatzki, managing director at Feri.
Nearly half (45%) plan to up their real estate investments via Spezialfonds and only 17% via direct property investments.
Kubatzki pointed out the “trend towards more indirect real estate investments will continue” and added this trend has been visible since the first survey Feri did of this kind in 2004.