Institutional real estate mandates growing- survey

The majority of US and European institutional investors are increasing their allocation to real estate despite the global financial turmoil and North America is the most favoured investment location, according to a survey published by J. E. Roberts Companies (JER).

Sixty percent of all respondents who took part in the survey performed by branding firm Siegel+Gale from 15-26 September this year indicated their mandate for real estate is growing. When asked to rank their top choices of investment location, 44% of respondents chose North America, 30% selected Asia and 18% named Europe.

'It is encouraging to learn that despite the current turmoil in the in the overall financial markets, investor appetite for commercial real estate continues to grow,' said Michael Pralle, president and chief operating officer of JER. 'JER has been through volatile cycles before and we understand how to operate in both good times and bad. Investor confidence in the commercial real estate sector is in line with our forward-looking perspective overall.'

The findings of the survey also indicated that transparency, regular communication, and longevity of the firm's principals are also key drivers for investors, with 90% citing transparency, 82% naming regular communications, and 82% noting longevity as important when considering a real estate investment firm. Senior management, overall performance and history/reputation are other important factors investors consider when selecting a particular commercial real estate investment firm.

The participants in this survey were composed 71% of US investors, 26% European investors and 3% of investors from other locations. 87% of respondents were institutional level investors. The majority of respondents are decision-makers with leading pension funds, followed by executives from financial institutions, endowments and foundations.