A recent annual survey carried out by real estate funding specialist ASK Partners (“ASK”) of its 250 high net worth investors and family offices, shows respondents: increasing their allocations to real estate, a concern for sustainability and the continued appeal of a digital investment platform.
According to a survey of high-net-worth real estate investors and private family offices, predominantly based in the UK, property as an asset class is well positioned to weather economic uncertainty and on average these investors are looking to increase their allocation to real estate by 25% in the next 12 months. 86% have increased or kept their allocation the same in the last 12 months.
Yet, on a sliding scale from -5 to +5, respondents’ current view on the UK economy, at the time of the survey in June 2022, was an average of -1 with rising inflation being the biggest economic concern, followed by rising interest rates and geopolitical risks. However, economic concerns are potentially outweighed by the fact that from the standpoint of individual portfolios, real estate has continued to perform well. Although, some investors are moving away from higher risk opportunities and the results show a trend for lower risk strategies with investors citing a preference for shorter term, first charge loans.
Daniel Austin, CEO and co-founder at ASK, said: “The investors we surveyed are clearly showing a strong appetite for real estate despite the current economic climate. In times of volatility and particularly high inflation, investors have traditionally turned to real estate as an asset class and we are pleased to be able to continue to offer attractive real estate debt opportunities on our platform.”
In addition, results showed sustainability as an important consideration for investors, with 41% saying they already or will factor it into investment decisions.
Austin added: “We were delighted to see an increase in the importance of sustainability in investors’ decision making and as a result environmental concerns will become a more significant part of our evaluation process.”
ASK investors currently self-select value-add investment opportunities on a digital platform from a range of property asset classes within the UK. An overall preference was cited for residential property followed closely by warehousing and logistics, however many deploy an opportunistic strategy. 65% also expressed an interest in investing in an ASK fund. Overall, investors are requesting more investment opportunities.
Doug King, COO and co-founder, added: “This is a positive reflection of the strength of the UK real estate market and it is not surprising to see a greater preference for residential and logistics given their resilience during the pandemic. A clear appetite for a fund creates an exciting opportunity for us to seek out more value-add opportunities across sectors and throughout the UK and, without compromising our robust credit processes, continue to provide the diversity of loans and above-average risk-adjusted returns to meet the varied risk appetites and preferences of our growing investor base.”
Mark Templeman, chief information officer at ASK, responsible for delivering the development roadmap of the digital investment platform, said,
“Since the pandemic, we expected to see a greater willingness to invest and manage personal investments online and these results show a strong demand from our investors for a greater availability of investment opportunities and products on our digital platform; a key driver to continually develop our platform to make it best in class.”
65% plan to use the recently piloted secondary market exchange once it is fully rolled out, to increase liquidity, shorten investment cycles and provide flexibility.
Templeman added: “It is very pleasing to see a clear desire from investors for the full rollout of our secondary market exchange. This will offer a seismic shift in investment potential to currently illiquid products.”
