1. What do the investors need?
Institutional Investors
What will markets bring in 2017?
Non-listed real estate
Maurits Cammeraat
29 June 2017
Director of Professional Standards

2. Next 30 minutes… Who the investors are
What investors need to know in order to spend
Investment intentions in Central Europe

4. Example: Dutch pension funds
Invested capital
Billion €
Real Estate
116
Indirect Real Estate - Non Listed 49
Indirect Real Estate – Listed 54
Direct Real Estate 13
Rest including stocks and bonds
1,168
Total
1,284 9%
Source: DNB, 2017

5. All investor types increase allocation to real estate
So, allocations to real estate are to increase and this can also be seen across every investor type.
Other investors, which include sovereign wealth funds, government institutions, family offices, etc, on average have greates real estate allocations and planing to advance their real estate holiding even further.
Pensions funds also have high allocations and are only very slightly under target while insurance companies have much lower current allocations compared to other invesro types which they plan to remedy in 2017.
Note: Equally weighted allocations; excludes investors with 100% real estate allocations

6. Enthusiasm for real estate remains undimmed
Diversification benefits continue to attract
Real estate continues to draw in capital
Real estate allocations have been increasing
It’s been almost a decade since the global finance crisis and the enthusiasm for real estate investment remains undimmed.
Investors are attracted to the diversification benefits that real estate brings, not only to a multi asset portfolio, but also a real estate portfolio itself, as well as geographical and sector diversify.
As such capital continues to pour into the sector and capital raising activity was at a record high last year.
As a result allocations to real estate continue to rise.

7. Allocations set to rise across the board
As such, allocations to real estate are expected to increase everywhere regardless of investor domicile.
The biggest increase is indicated by UK domicled investors, followed by investors based in the Republic of Korea and Japan, with their target allocations set for double digits.
None of investors are planning to reduce their real estate allocations for 2017.
Note: Equally weighted allocations; excludes investors with 100% real estate allocations

8. What investors need to know in order to spend

9. Key requirements are captured in INREV Guidelines

10. Real estate, investment vehicle and manager
What are the assets / portfolio? How is the investment structured? Who is the manager?

11. Sustainability is important for most investors
INREV Survey: How important are the ESG risk and performance aspects to you?
If the header and / or sub-header take more than one line, please move down other elements so that nothing is overlapping.

12. There are clear preferences
Regulated
Closed end
Discretionary
Similar by co type
Similar by domicile
Small investor pool
Blind pool
GAV up to €500 million
Single sector
Single country
Non-regulated
Open end
Non-discretionary
Dissimilar by co type
Dissimilar by domicile
Large investor pool
Seeded pool
GAV above €500 million
Multi sector
Multi country
So generally the preference is for ….

13. Value added has the most attractive prospects
Wiht Europe maintaining its attractiveness, investors are looking for investment opportunities that add value. This is indicated by the most preferred investment style being value added, which is now ahead of core.
The increase in preference in value added comes at the expense of opportunity, with the popularity of value addded widespread across all investor domiciles.
Style preferences look similar to last year that resembles 2007 levels, though are not completely matched. There is a stronger desire for value added this year than there was last year, and no two years look identical in preference as the desire for core inreased by 140 bps.
This shift comes at the expense of opportunity

14. Investment intentions in Central Europe?
Now that’s the backdrop to this year’s results – have we heard this all before?

15. 314 Respondents 184 fund managers 119 investors
11 fund of funds managers
314 Respondents

16. Assets under management
2,100,000,000,000

17. How does CEE rank for investors?
So, where can you find value?
This year the rankins shift slightly with UK and France jointly occupying the top spot on the rankings. Germany is third, follwing the Netherlands and Spain, whith the latter seeing a notable jom from ninth place in 2016.
Other countries that made it into the top ten are: Finland (41.4%) and Italy (37.9%) taking sixth and seventh places respectively and Belgium (36.2%) and Sweden (36.2%) in joint eighth place. Denmark (32.8%) concludes the top ten.
If we take a look at preferences between domestic and non-domestic investors, broadly speaking they aare aligned. However, there is some indication of home bias in Spain, Italy and Belgium where the non-domestic investors are noticeably less keen on these markets than domestic investors are.
CE is in top-10 as seen by investors

18. Similar ranking applies for all respondents
So, where can you find value?
This year the rankins shift slightly with UK and France jointly occupying the top spot on the rankings. Germany is third, follwing the Netherlands and Spain, whith the latter seeing a notable jom from ninth place in 2016.
Other countries that made it into the top ten are: Finland (41.4%) and Italy (37.9%) taking sixth and seventh places respectively and Belgium (36.2%) and Sweden (36.2%) in joint eighth place. Denmark (32.8%) concludes the top ten.
If we take a look at preferences between domestic and non-domestic investors, broadly speaking they aare aligned. However, there is some indication of home bias in Spain, Italy and Belgium where the non-domestic investors are noticeably less keen on these markets than domestic investors are.
CE is between Finland and Denmark as seen by all respondents

19. Investors are confident about the region
Note: 57 respondents indicated their preference for Central Europe; of those: 22 investors, 33 fund managers; 2 funds of funds managers

20. Anglo-Saxons are ahead of the queue

21. Industrial / logistics stands out from the crowd
1. Ind. / Logistics (77.3%)
2. Retail (59.1%)
3. Office (54.5%)
4. Residential (27.3%)
5. Student acc. (13.6%)
Note: investor preferences

22. Thank you

23. Central Europe - Includes Czech Republic, Poland, Hungary, Slovakia, Slovenia Eastern Europe - Includes Romania, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Kosovo, Macedonia, Albania, Bulgaria, Russia, Ukraine