GLOBAL - Pension funds and fund managers attending IP Real Estate's Investor Forum & Awards in Amsterdam are planning to allocate more capital to emerging market real estate over the next 3-5 years.
Almost half of delegates surveyed at the conference said they planned to allocate more than 30% of their capital to non-domestic real estate assets over the next five years, with part of this percentage dedicated to investments in Asia and Latin America.
Many said emerging markets offered an opportunity for investors to diversify their investments, as many are in the process of restructuring their real estate portfolios.
Marian Berneburg, portfolio manager for indirect real estate at Aerzteversorgung Westfalen-Lippe, said: "Three factors made us decide to restructure our portfolio. We first looked at the size, as the same strategies will not be available for big and small investors. Then, we looked at long-term growth, and finally, we studied new locations, as we think scarcity is the key.
"As part of our new plan, we are very keen on emerging markets, where inflation is particularly high and which offer a long-term growth investment strategy. This is a strategic and long-term decision."
Matthew Ryall, group head of fund selection at Allianz Real Estate, said: "The reason for us to invest outside Europe is to do something we cannot do in the euro-zone."
Due to the high inflation in emerging countries, investors seek to invest more in retail assets, he said.
Scott Crowe, global portfolio manager at Cohen & Steers, said: "The consumer base in the emerging markets is growing quickly, with millions of people moving into the middle class and growing their spending power.
"Brazil, the Philippines and some countries in Asia are, therefore, particularly interesting, as they offer a lot of potential in terms of growth and are relatively open for foreign investors."