2019 ncreif fall meeting going global · dollar amount to be raised by global and international...

2019 NCREIF Fall MeetingGoing GlobalGEOFFREY DOHRMANN, INSTITUTIONAL REAL ESTATE. INC.

Demand for global & internationalinvestment opportunities

Projected New Capital Flows – (US Respondents)

At least $59B in new capital projected for 2019

59

71

42

18

3531

49

56 55

63

68

46

65

59

0

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Actual capital flows Expected capital flows

Pro

ject

ed N

ew C

apit

al A

lloca

tio

nto

Rea

l Est

ate

($B

)

Source: Institutional Real Estate, Inc. • Kingsley Associates; 2019 Annual Global Investor Survey

12.9% 6.5% 8.7% 69.0% 0.7% 2.2% 0.0%

Target allocations continue to favor core

53

.3

16

.9

15

.7

7.3 3

.3

2.4

0.0

4

54

.0

18

.4

10

.5

3.1

6.1 7

.7

0.3

50

.3

22

.5

11

.0

9.1 3.7

3.3

0.0

52

.8

20

.9

11

.1

7.6 4

.6

1.3 1.7

0

10

20

30

40

50

60

US - Core /Core Plus

US - Value-Added

US -Opportunistic

Non-US RealEstate

US - REITs US - RE Debt US - CMBS

Perc

ent

of

Tota

l Rea

l Est

ate

Ass

ets

(%)

2016 2017 2018 2019

Non USInvestorTargets

Historical Real Estate Target Allocations – (US Respondents)

28.1%

82.3% 7.6%


Core11%

Value-added11%

Opportunistic28%

RE Securities2%

RE Debt4%

Core9%

Value-added13%

Opportunistic19%

RE Securities2%

Core55%

Value-added6%

Opportunistic5%

RE Debt3%

Core15%

Value-added1%

Opportunistic3%

RE Debt9%

USEx-US

Investments(8% of Total)

US investors focus on opportunistic foreign investments

Europe

Asia-Pacific

C./S. America

Non USEx-US

Investments(69% of Total)

Distribution of Ex-US Investments (Target)


New capital allocations in line with 2018 actuals

31%

30%

27%

24%

15%

20%

6%

8%

4%

4%

16%

13%

2019 Projected

2018 Actual

US core US value-added US opportunistic

Real estate securities US private real estate debt CMBS

Foreign investments

Expected Capital Flows to Real Estate – (US Respondents)


Foreign investors increase capital allocations to core

39%

32%

26%

25%

16%

20%

4%

1%

15%

21%

1%

1%

2019 Projected

2018 Actual

Core Value-added Opportunistic

Real estate securities Private real estate debt CMBS

Expected Capital Flows to Global Real Estate – (Non-US Respondents)


Core9%

Value-added27%

Opportunistic29%

RE Debt1% Core

2%

Opportunistic31%

Core15%

Value-added36%

Opportunistic25%

RE Debt5%

Core1%

Value-added11%

Opportunistic8%

Europe

Asia-Pacific

C./S. America

US investors favor value-added and opportunistic European strategies for non-US investment

Expected Capital Flows to Real Estate – (US Respondents)

2018Actual

Ex-USInvestments

(13% of Total)

2019Projected

Ex-USInvestments

(16% of Total)


Core25%

Value-added12%

Opportunistic11%

RE Securities1%

RE Debt10%

Core3%

Value-added4%

Opportunistic3%

RE Debt4%

Core4%

Value-added9%

Opportunistic6%

RE Debt7%

Foreign investors increase emphasis on Asia-Pacific in 2019

Europe

Asia-Pacific

C./S. America

United States

2018 Actual New Capital

2019Planned New Capital

Expected Capital Flows to Real Estate – (Non-US Respondents)

Core24%

Value-added12%

Opportunistic7%

RE Securities3%

RE Debt5%

Core10%

Value-added6%

Opportunistic3%

RE Debt4%

Core5%

Value-added8%

Opportunistic6%

RE Debt6%


Region US Foreign

US 4.14 3.62

Canada 2.69 3.07

Mexico 1.95 1.21

Region US Foreign

UK 3.00 3.14

Northern Europe 3.33 3.89

Southern Europe 3.00 3.30

Central / Eastern Europe 2.34 2.80

Russia 1.23 1.00

Region US Foreign

Japan 2.86 3.14

Australia / NZ 3.14 3.65

China 2.42 2.85

India 2.00 2.11

Region US Foreign

Brazil 1.79 1.64

South America 1.68 1.69

Central America 1.53 1.77

Increase from 2018

Decrease from 2018

Attractiveness of Real Estate by Region – US vs. Non-US Respondents

Attractiveness of Asian regions increase, while most regions decline

No change from 2018Region shading based on ranking of attractiveness

within US and foreign respondent pools


Yes33%

No67%

Non-US investors more likely to pursue JVs with REOCs

USInvestors

Willing to do Joint Venture with REOC

Yes63%

No37%

Non USInvestors


US investors continue increasing their focus on sustainable and responsible investment policies

10%

26%38%

4%

6%

87%

71%

56%

0%

25%

50%

75%

100%

2014 2015 2019

Currently have a policy No policy, but plans for one No policy and no plans for one

Perc

enta

ge o

f R

esp

on

den

ts (

%)

US Respondents

53%

85%

57%

11%

5%

19%

37%

10%

24%

2014 2015 2019

Non-US Respondents


Current supply of global & internationalinvestment opportunities

1.683 on

an

annualized

basis

Number of global and international funds offered

23

488

1,368

538

0

200

400

600

800

1000

1200

1400

1600

1986-1995 1996-2005 2006-2015 2016-2019

Source: Institutional Real Estate, Inc. • FundTracker database

Number of real estate investment management firms

61%

39%

US-based firms

Non US-based firms838

532


Number of real estate investment management firms17, 2%

63, 7%

47, 6%

709, 85%

US-based firms offering global andinternational funds

US-based firms offering global funds

US-based firms offering international funds

US-based firms NOT offering global orinternational funds


Number of US investment managers offering

27, 14%

81, 44%26, 14%

52, 28%

Global Open-end Funds

International Open-end Funds

Global Closed-end Funds

International Closed-end Funds


Dollars targeted by US investment managers offering

$17.30, 16%

$23.56, 21%

$28.89, 26%

$41.37, 37%

Global Open-end Funds

Intrnational Open-end Funds

Global Closed-end Funds

International Closed-end Funds


Number of Global and International Fund Offeringsoffered by US Investment Managers

4, 11%7, 19%

11, 30%

9, 24%

6, 16%

Global Value Add Funds

Global Opportunity Funds

International Core/Core Plus Funds

International Value Add Funds

International Opportunity Funds


Dollar amount to be raised by Global and International Fundsoffered by US Investment Managers

$4.95, 12%

$10.85, 25%

$9.76, 23%

$3.39, 8%

$13.58, 32%

Global Value Add Funds

Global Opportunity Funds

International Core/Core Plus Funds

International Value Add Funds

International Opportunity Funds


• Thomas Lee, Executive Director & CIO, New York State Teachers Retirement System

• Matthew Johnson, Executive Director, Regional Portfolio Manager, UBS

• David Bradford, Retired, Former Head of Global Client Service, PGIM

Our panelists

2019 ncreif fall meeting going global · dollar amount to be raised by global and international...

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