Most German institutional investors want to increase their real estate allocations by 2017, according to a survey by Feri EuroRating Services.
The report found that, over the past four years, the share of real estate in German institutional portfolios increased by more than one-third, from 6.1% in 2010 to 8.3% in 2014.
Real estate quotas in insurance company portfolios also increased 鈥� despite incoming Solvency II rules 鈥� from a similar level to 7.6% in 2014.
One-third of the 90 institutions surveyed 鈥� with real estate investments amounting to 鈧�63bn in total 鈥� want to step up their investment activities in Germany.
The survey also highlighted an increase in core-plus investments, becoming a greater proportion of investors鈥� property portfolios 鈥� from 16% in 2012 to 26% last year. A small proportion (9%) of investors said they wanted to increase their exposure to core-plus assets in the future.
One-quarter of investors want to increase their exposure to residential real estate and 20% want to invest more in retail.
Only 7% want to increase their exposure to office properties. 鈥淥ffice on the other hand is losing in significance,鈥� noted Wolfgang Kubatzki, managing director at Feri.
Nearly half (45%) plan to up their real estate investments via Spezialfonds and only 17% via direct property investments.
Kubatzki pointed out the 鈥渢rend towards more indirect real estate investments will continue鈥� and added this trend has been visible since the first survey Feri did of this kind in 2004.
