Global real estate has had a great run.Performance has been strong; global property funds returned 12.5% year-over-year as at Q1 2016, versus low single-digit returns for fixed income, REITs and negative returns from the wider equity market. Target allocations to real estate have been steadily rising and actual allocations have failed to keep pace, so there is more capital to deploy and, investors hope, more good performance to come.
With that backdrop, one would think that real estate investors were growing with confidence, but, instead, there is growing caution. Greater economic growth should have materialised by this point in the cycle, with rate rises following. Instead, the IMF, World Bank and other major institutions have downgraded their economic growth forecasts and volatility in financial markets has remained elevated,4 cooling investor confidence.
Source : AXA Real Estate