MIPIM RE-Invest: Investor appetite for risk on rise

Investors are more willing to target distressed assets as confidence returns to the global economy, according to a survey revealed on Tuesday at MIPIM.

The survey, conducted by KPMG, found that 42% of investors are now focusing on opportunistic strategies, compared with 32% at the same point last year.

The survey as unveiled at the RE-Invest summit at MIPIM in Cannes, a closed-door event that brings together a number of pension funds, sovereign wealth funds and other large institutional investors.

Improving economic conditions and enhanced liquidity in 2013 have changed investors’ preferences.

The survey found that 81% now prefer direct holdings/separate account mandates – up from 41% last year.

Club funds, deals and joint ventures are also more popular – up in preference from 35% last year to 55% this year.

European core markets will remain investment hotspots over the next five years, the survey found, with 90% of respondents agreeing that the region will continue to attract overseas investment and that second-tier markets such as Ireland, Italy, Spain and Portugal will become the focus this year and in 2015.

Western Europe continues to attract the maximum number of investors.

In addition to France, Spain and the UK, Germany is a preferred investment location.

Demand for real estate is also seen across the US, considered a sought-after investment destination by 29% respondents.

The trend is similar to KPMG’s findings last year, when respondents picked New York as a major investment destination.

Overall, investors are optimistic about increasing their exposure to real estate, with 81% of respondents supporting investment in the asset class.

The survey, along with research conducted by IP Real Estate, was produced to help generate debate among some of the world’s largest real estate investors at the RE-Invest summit.