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Feature: Navigating the reefs
12 March 2010
Now that real estate is showing signs of recovery, investors are being invited to take another look at the asset class. But, before they commit, they should be aware that some parts of the sector are recovering faster than others
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Real estate
As crisis-hit markets head down, the saying goes, correlation goes up. And so it has proved with real estate, which has long been valued for its diversification qualities by asset managers with long-term investment horizons. The crisis sent property prices into a downward spiral for much of 2009, lagging the equity markets but experiencing a fall in yields of 44% from peak to trough.
For many real estate investors, last year was a time to find other asset classes or to stay in cash. “There is so much cash on the sidelines, at the moment,†says Alan Supple, European portfolio manager at Urdang, one of BNY Mellon’s specialist boutiques. But if investors were not investing in real estate last year, it is because they were not investing at all.
A Prequin survey of institutional private equity real estate investors revealed that “many private equity real estate investors,...
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