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Allocations to Real Estate

by Forena Akthar

  • 21 Sep 2011
  • RE

The proportion of capital allocated to real estate as a percentage of assets under management (AUM), and how this compares to investors’ target allocations, varies across institution type and location. 69% of all investors in private real estate funds are currently below their overall target allocations to real estate. 20% are at their targets and only 11% are above their target allocations.

72% of North American institutions are below their targets to real estate; the corresponding figure for Europe is 66% and 62% for Asia and Rest of World investors. 11% of institutions from North America are above their target allocations to real estate, with 9% from Europe and 22% from Asia and Rest of World above their targets respectively. Only 17% of North American, 25% of European and 16% of Asia and Rest of World investors are currently at their real estate target allocations.

In terms of investor type, with the exception of asset managers, the majority of investors within each institution category are below their target allocations to property. More than 70% of public pension plans and insurance companies are below their targets, and over 60% of endowments and private sector pension funds are below their real estate target allocations.

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