New research with 200 UK wealth managers, financial advisers, and investment professionals with clients with over £200,000 of investible assets conducted by TIME Investments, which specialises in asset-backed income-producing funds, highlights the expected increase in demand for real estate in client investment portfolios.
Over three quarters (77%) of respondents expect to allocate more to real estate over the next 12 months. More than half (58%) of respondents said that for the average client the target allocation to real estate is 11-15%, and 26% said 6%-10%.
When asked what is driving allocation to real assets such as real estate, the key factor cited by respondents is the desire to de-risk portfolios through diversification (68%), increased focus on ESG (61%), a desire for secure income streams (45%), and defensive investment strategies (44%).
In terms of the real estate subsectors respondents felt industrials offered the biggest investment opportunities over the next 12 months, followed by data centres and logistics, with student accommodation and supermarkets regarded as the least favourable.
Roger Skeldon, Head of Real Estate and Fund Manager commented: “Our research shows that advisers and investment professionals are increasingly positive towards real estate, with allocation to the asset class set to increase over the coming quarters. This is being driven by factors which provide a counter to the current turbulent economic climate but also an increased focus on ESG.
As real estate asset management experts, we continue to focus investment in sectors with stronger rental growth, including in our favoured ‘Beds, Meds & Sheds’ cohort, with long-term demand drivers. Sectors such as student accommodation continue to see a favourable supply/demand imbalance, which could allow large operators, especially with development pipelines, to continue to grow their businesses. Sectors with long-term demand drivers such as data centres have continued to attract investment and strategic partnerships to add to expansion capacity.”
TIME is part of the Alpha Real Capital Group, which encompasses Alpha Real Capital LLP (AlphaReal) and TIME Investments. AlphaReal is a specialist real assets investment manager focused on secure income strategies. It invests in UK and European assets with predictable secure long-term cash flows. It provides market leading and innovative real asset solutions across a range of investments such as Commercial Ground Rents and long lease property, renewable infrastructure, social infrastructure and secured lending, combining operational real estate expertise and fixed income skills.
TIME is the Group’s authorised wealth management investment solutions arm. The Group works with a wide range of UK, European and international investors, including pension funds and other large institutional investors, as well as private investors, family offices and wealth managers. Together, the Group has a 180-plus strong professional team and £4.5 billion of assets under management.
The value of investments and the income from them may fall as well as rise as a result of fluctuations in the market, currency or other factors and investors may not get back the original amount invested. Any past performance data cited is not a reliable indicator of future results.
