ALTERNATIVE INVESTMENTS Trends in the market for investments in real estate Grand Hôtel Stockholm 27 April 2016 Stephen Ryan Research Manager 2
INREV European Association for Investors in Non-Listed Real Estate 383 Members 114 United Kingdom 60 Germany 56 Netherlands 42 Nordics 35 North America 20 Luxemburg 16 France 12 Southern Europe 4 Asia 2 Middle East 22 Other In 27 Countries (April 2016) 2
Mission To increase transparency and accessibility To promote professionalism and best practices To share and spread knowledge 3
INVESTMENT INTENTIONS INTO REAL ESTATE 4
Background to INREV s annual surveys Investment intentions Forward-looking Detailed questions to institutional and managers Global survey in partnership with Asia and North American associations 345 participants in most recent survey Capital raising survey Backward-looking Detailed questions to managers Global survey 153 participants in most recent survey 5
billion Investment into real estate surpasses 2007 levels 900 Capital flows geographic investment zone, excluding development sites 800 700 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Asia Pacific Europe North America Other Source: Real Capital Analytics 6
Korea, Republic of United Kingdom Switzerland Finland Canada Italy Australia Sweden The Netherlands Denmark United States Germany Japan France % of overall portfolio Intentions are to further increase allocations 25% 20% 15% 10% 5% 0% -5% Allocations* to real estate Investor domicile Current allocation Increase to target Source: ANREV / INREV / PREA Investment Intentions Survey 2016; *equally weighted allocations 7
Minimum of 50 billion targeting real estate Amount expected to be invested in real estate in 2016 47.7 billion 5.9 billion Fund of funds managers Asia Pacific European North American Source: ANREV / INREV / PREA Investment Intentions Survey 2016 8
Capital is willing to cross borders Asia Pacific European North American 100% 100% 100% 90% 90% 90% 80% 80% 80% 70% 70% 70% 60% 60% 60% 50% 50% 50% 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 0% Current region Target region 10% 0% 5,7% Current region 11,2 % Target region 10% 0% Current region Target region Source: ANREV / INREV / PREA Investment Intentions Survey 2016 9
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Quarterly total return (%) For the diversification benefits of real estate 6% Quarterly fund performance 5% 4% 3% 2% 1% 0% -1% -2% Asia Pacific Europe US Source: GREFI (ANREV / INREV / NCREIF Global Real Estate Fund Index) Q4 2015 10
Europe top destination for investment Expected destination for investment in 2016 Europe United States Other Asia Pacific Americas ex US Source: ANREV / INREV / PREA Investment Intentions Survey 2016 11
Germany France United Kingdom Netherlands Belgium Finland Sweden Denmark Spain Italy Norway Luxembourg Switzerland Portugal Austria % of respondents With major markets seen as most attractive 80% 70% 60% 50% 40% 30% 20% 10% 0% Preferred investment locations Source: ANREV / INREV / PREA Investment Intentions Survey 2016 12
% of respondents A clear preference for core 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% French Investment styles that plan to invest in Dutch Italian Swiss Asia Pacific Nordic Core Value Added Opportunity German UK North American Source: ANREV / INREV / PREA Investment Intentions Survey 2016 13
Proportion of equity raised Pension funds provide lion s share of new equity 100% 90% Equity raised by investor type Other 80% 70% 60% 50% 40% 30% 20% High net worth individuals / Family offices Funds of funds Charities, foundations, non-profit organisations Government institutions Sovereign wealth funds Insurance companies 10% 0% 2013 2014 2015 Pension funds Source: ANREV / INREV / NCREIF Capital Raising Survey 2016 14
Recap on INREV s annual surveys Investment intentions Forward-looking Investors and managers Global survey 345 participants in most recent survey Let s compare 2015 intentions with reality Capital raising survey Backward-looking Fund managers Global survey 153 participants in most recent survey 15
Total equity raised ( billion) Introduction: new equity reaches 123.6 billion 140 Equity raised for the non-listed real estate industry in 2015 120 100 80 60 40 20 0 2012 2013 2014 2015 Non-listed funds Separate accounts JVs and club deals Funds of funds Non-listed debt products Source: ANREV / INREV / NCREIF Capital Raising Survey 2016 16
Are regional intentions actually carried out? Source: Investment Intentions 2015; Capital Raising Survey 2016 17
Are style intentions actually carried out? Source: Investment Intentions Survey 2015; Capital Raising Survey 2016 18
Concluding remarks Real estate investment volumes exceed 2007 levels New equity raised for non-listed real estate reaches new highs Allocation to real estate to increase almost everywhere Around 50 billion is targeting real estate in 2016 Pension funds provide the lion s share of new equity into real estate 19
Where are we? 20
Contact details Stephen Ryan stephen.ryan@inrev.org INREV research research@inrev.org 21