The 2021 Global Management Survey, published this week by Nareim, Inrev and Ferguson Partners, paints a varied picture of real estate investment managers’ recovery from Covid. In terms of 2020 financial performance, 38% of respondents recorded a 10% increase in EBITDA, while 32% reported a 10% drop.
The median firm in the survey recorded net AUM growth of 6%. While still positive, this reflects the first year of slowing growth since 2016. The survey reports 29% of respondents recording a year-on-year fall in AUM – up from 21% in 2019.
Unsurprisingly, employee numbers were impacted during the pandemic. In 2020, headcount either fell or stayed the same for 42% of respondents, versus 26% in 2019; and the number of investment managers who decreased headcount grew from 17% to 27% over the same period.
However, in a sign of growing confidence, 77% of market participants expect to increase employee numbers in 2021, with 44% looking to raise that number by 5%. Furthermore, 80% of respondents expect their 2021 acquisition activity to surpass that of 2019.
This positive outlook echoes findings from broader market data, such as the Global Real Estate Fund Index, published by Inrev, Anrev and NCREIF. The Q2 2021 edition of this index reports global non-listed real estate vehicles recovering to pre-pandemic levels from a material dip in Q2 2020, with a total return of 3.5% – the strongest result in 15 years and well ahead of the 2.1% quarterly average for 2015-2019.
Other findings from the 2021 Global Management Survey, highlight investment managers’ increasing focus on the importance of ESG, with 50% of respondents leveraging insights from their ESG-focused committees to drive key initiatives. For many market participants, sustainability is a significant priority with many firms hiring dedicated sustainability leaders and enacting sustainability committees to tackle pressing challenges related to net-zero carbon performance, energy efficiency, green building certification, and tracking and metrics.
'These findings reflect the realities of a global economic aberration prompted by the pandemic. As with other asset classes, real estate investment managers witnessed varied fortunes in 2020. But the industry shares a resilience of spirit – glimpses of which are already flowing through to performance, indicating a probable healthy post-pandemic rebound,' commented Lonneke Lo¨wik, CEO of Inrev.
