UNITED STATES - US real estate investment managers are shifting their focus away from deal-specific research to strategic portfolio analysis, more in line with their European counterparts, as a side effect of the current market uncertainty, according to the International Property Databank (IPD).
US managers commonly focus on identifying the best individual assets on their own terms, irrespective of whether they fit into a pre-set strategy, while in contrast European investors tend to place more importance to portfolio analysis and may rule out certain deals that fall outside a strategy.
For this very reason, IPD has found it more challenging to establish its portfolio analysis and benchmarking service as fully in the US as it has done in many European countries.
"European investors tend to be very focused on portfolio strategy. They go for the strategy and then they find the assets to fill that strategy. That has really helped IPD's businesses in the European markets," said Simon Mallinson, head of US services at IPD.
US managers, on the other hand, tend to be more focused on individual asset research, he added.
"They find an asset, they underwrite it, they work out what its performance is going to be and then they find a portfolio for it to fit into."
But investors all over the world today are looking to consolidate their portfolios and are placing much more attention on their existing portfolios, and this is likely to benefit performance analysis service providers.
IPD has recently seen an upsurge in business in the US -something Mallinson attributes inadvertently to the current market pessimism.
"This recent turmoil has actually been good for us, because the US managers have stopped looking at deals now and are actually looking back at their existing portfolios," he said.
