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Global institutional investors’ average target allocation to real estate exceeds 10 per cent

Pensions & Investments

The average target allocation to real estate by global institutional investors has exceeded 10% for the first time, said a survey from Hodes Weill & Associates and Cornell University's Baker Program in Real Estate.

According to the 2017 Institutional Real Estate Allocations Monitor, among the 244 global institutional investors with aggregate assets of $11.5 trillion recorded for the report, the average target allocation in 2017 was 10.1%, up from 9.9% in 2016. About 44% of the institutions now have target allocations to real estate exceeding 10%, up from 27% and 18% in 2016 and 2015, respectively.

Actual allocations, however, remained underweight to targets, according to the survey. About 60% of surveyed institutions said they were underweight to real estate, up from 50% in 2016. Overall, the average actual allocation is 9.1%, 100 basis points below the average target.

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