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Global REITs on the up with institutions
Institutional investors are increasing allocations to real assets, with about $60 million in top-up funds invested in Principle Global Investors this week.
Increased allocations align with the fund manager’s CREATE report released in June, which found institutions were looking at real assets such as property, infrastructure and commodities as a way to diversify away from traditional allocation strategies.
Simon Hedger, Principle Global Investors senior analyst, property securities, said the company had received investment into global REITS from all over the world, including Australia.
The appeal of REITs to the western world has grown as populations age and income grows in importance, according to Hedger, who claimed Principle had received the first allocation ever by a German pension fund to listed REITS.
Hedger said he expected to see interest continue to grow: the earnings growth profile of listed stocks indicated a return of 10 per cent in the next 12 months, he said.
“It [the global REIT sector] has been steady and reliable in the overall risk/return profile and that’s what a pension fund should be looking to do - match its assets with longer-term liabilities,” he said.
“Things are really moving along in the sector - there’s new opportunities with new companies opening, the sector’s getting bigger, it’s got a decent yield and that makes it really attractive to pension funds,” Hedger said.
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