Investors are considering making new fund commitments again, said INREV at its Paris CFO conference today.
The association’s chief executive Lisette van Doorn said investors considering commitments into non-listed funds as there were a considerable number of new fund launches and existing fund investment opportunities in due diligence. “This may indicate that investors are anticipating opportunities to emerge for non-listed funds not too far in the future,” she added.
However, an INREV survey found that investors and fund managers now think it unlikely that the property market will have improved by the end of next year, out of line with expectations at the end of 2008. “What we see is a difference in the rebound between the different real estate asset types.
Listed real estate is already experiencing considerable capital inflows and the same applies for direct real estate. Non-listed property funds are trailing the other real estate types in the property cycle. Since the beginning of this year they have only attracted 14 percent of the equity committed to real estate,” said Van Doorn.
Uncertainty about the property market, valuation issues and financing difficulties are the main reasons for investors to slow down making new investments, the research said. At the same time, fund managers were starting to see light at the end of the tunnel. Almost half of the fund managers were more confident that they are could execute transactions at appropriate prices. This was also seen in the figures with non-listed property funds having transacted property assets sales of €3.6 billion and acquisitions of €2.7 billion since the beginning of the year.
The majority of the respondents – 85 percent – continued to have confidence in the non-listed property fund model, although fund managers were slightly more optimistic than investors.
Lonneke Löwik, director of research and market Information, said: “Although fund managers are still spending most of their time on managing existing funds, this is slowly changing. We see that fund managers are reacting to opportunities in the market with some of last year’s suspended funds being reintroduced and the first new funds appearing.”