Institutional investors continue RE drive

US and European LPs say they are continuing to grow their mandate for real estate, with private equity the investment vehicle of choice, according to a survey by JER.

Despite the recent turmoil in the financial markets, institutional investors around the world are continuing their focus on real estate investments.

According to a survey by private equity real estate firm, JE Robert Companies, 60 percent of institutional investors said they expected to see their mandate for real estate grow in the future. Investors in the survey, conducted between 15 September and 26 September, included pension funds, financial institutions, endowments and foundations.

Private equity was the most attractive investment vehicle in commercial real estate, with 42 percent investing through private equity, and 29 percent in REITs and 29 percent in direct investments.

The most attractive regions for investors included North America, which 44 percent of survey respondents found most attractive, followed by 30 percent for Asia, and 18 percent for Europe. Seven percent of respondents found Latin America the most attractive investment location, with one percent choosing the Middle East.

The survey also revealed that in considering a real estate investment firm, institutional investors ranked senior management and performance as the top factors in their consideration, with history and reputation another important consideration. 

The JER survey was comprised mainly of US investors, which made up 71 percent of all those surveyed, followed by European investors (26 percent).