Considering one’s Alternatives

It is a consistent theme of this blog that property investments are increasingly reliant on associated operational businesses. It is perhaps coincidence that those real estate investments with an established focus on operations tend to collectively comprise the group defined by the industry as ‘Alternatives’. Alternatively, it might be precisely by virtue of this focus that they have until relatively recently escaped the focus of mainstream investors. This is changing quickly, as Alternatives take up ever bigger shares of total investor allocations (currently 28%) and hence the titling of the sector might now be misleading. A report recently published by my Research colleagues casts a light on this area of opportunity. Key findings include that: (a) 76% of investment volumes in the sector had institutional buyers, (b) the biggest sub-sector is hotels (46% share of volumes), and (c) the best assets have typically been accessed through portfolio deals. The report goes on to categorise the different demand drivers across the sector, setting out a case why they should not be perceived as a single bucket of investments. To download your copy of the full report, click here.