Table of Contents
- Overview
- Catalyst
- Summary
- Methodology
- Executive Summary
- Market context
- Customer focus
- Table of Contents
- Overview 1
- Catalyst 1
- Summary 1
- Methodology 1
- Executive Summary 2
- Market context 2
- Customer focus 2
- Market Context 10
- The European property fund investment landscape is diverse as tastes
vary between markets and client groups 10
- Growth in the European property fund market has increased steadily in
recent years 10
- A fee structure encompassing both management and performance is most
suitable for property investment funds 11
- Europe is the key property fund investment geography and mixed use funds
are most favored by European investors 17
- Regulation and tax regimes are driving the offshore property funds
market' s challenge to the onshore market 20
- Outside of southern Europe, local players dominate the competitive
landscape 28
- Lack of interest will be the greatest barrier to higher take-up of
property investments while demand is expected to increase 31
- Data tables 33
- Customer Focus 45
- Property investment is most popular among institutional investors
compared to other client segments 45
- The advisory channel remains the primary distribution channel for
property investments across Europe 48
- Institutional clients will become the most important client segment in
the property investment market 52
- Data tables 59
- APPENDIX 65
- Definitions 65
- Methodology 65
- Further reading 66
- Ask the analyst 66
- Datamonitor consulting 66
- Disclaimer 66
- Table of figures
- Figure 1: Real estate funds have seen steady growth since December 2004
10
- Figure 2: A combined fee was judged by European asset managers to be the
most appropriate for REITs 12
- Figure 3: Italian asset managers had the most wide-ranging views on REIT
fee structures 12
- Figure 4: Almost two thirds of European asset managers felt that the
combined fee option was best for open-ended property funds 13
- Figure 5: German and Italian asset managers were less likely to feel
that the combined fee structure was most appropriate for open-ended property
funds 13
- Figure 6: Over half of asset managers surveyed believed that the
combined fee structure was best suited to closed-ended property funds 14
- Figure 7: There was significant variation between different countries
over the degree to which the combined fee structure was most appropriate for
closed-ended property funds 15
- Figure 8: European asset managers are confident that performance fees
will become more widespread 16
- Figure 9: The preference for investment in Europe among property fund
investors is set to increase over the next two years 18
- Figure 10: Investing in a mixture of commercial, retail and residential
property was the most popular strategy among European investors 19
- Figure 11: Both institutional and high net worth investors were fairly
evenly split between defensive, opportunistic and mixed reasons for
investing in property 20
- Figure 12: Regulation is the most significant barrier to the development
of the onshore property fund market 21
- Figure 13: The majority of asset managers in each of the major European
markets feel that onshore regulatory barriers hinder the development of
onshore property investment 22
- Figure 14: European asset managers generally feel that the regulators in
their countries do not adequately support real estate investment development
23
- Figure 15: Giving tax advantages to onshore property funds would do most
to encourage the onshore property fund market 24
- Figure 16: There is limited belief that onshore property investment will
come to rival the development of the offshore market 25
- Figure 17: The UK was marginally believed to be the most popular
jurisdiction for the launch of new property funds 26
- Figure 18: The UK property funds market will see a dramatic shift
towards funds launched offshore in the next two years 27
- Figure 19: European asset managers have mixed feelings about the
potential of REITs to compete with corporate bond funds 28
- Figure 20: Insufficient interest among potential clients and
insufficient promotion of products are the biggest barriers to greater
take-up of property investments among institutional clients 32
- Figure 21: Asset managers expect the biggest increase in demand to come
from wealthy clients seeking REITs, however the main customer group will
continue to be institutional clients seeking property funds 45
- Figure 22: There is no dominant property investment vehicle in Europe
across all client groups 48
- Figure 23: Mass market investors are most likely to access property
investment via an independent financial advisor 50
- Figure 24: The independent advice channel is the most popular in Europe
for distributing property investments to high net worth clients 51
- Figure 25: The direct sales channel is by far the most popular among
European asset managers in terms of institutional investors 52
- Figure 26: Over the next three years the institutional client base will
become more important in the property funds market 53
- Figure 27: Asset managers are generally positive about the year on year
growth expected for property funds in the institutional market 54
- Figure 28: A lack of interest among high net worth clients will stand in
the way of property fund development in this client segment 55
- Figure 29: Asset managers were cautiously optimistic about the future
year on year growth in demand for property investment among high net worth
clients 56
- Figure 30: Low interest in property investment among mass market clients
will do the most to hamper growth in take-up in the near future 57
- Figure 31: A low year on year increase in demand for mass market
property investment is most likely to occur 58
- Table of tables
- Table 1: Breakdown of Non-UCITS assets by category (excl. Ireland) 33
- Table 2: Answers to the question: What is the most appropriate fee
structure for REITs? 33
- Table 3: Answers to the question: What is the most appropriate fee
structure for an open-ended property fund? 34
- Table 4: Answers to the question: What is the most appropriate fee
structure for a closed-ended property fund? 34
- Table 5: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that fees linked to the performance of property
investments will become more common? 35
- Table 6: All answers to the question: Thinking of property funds, which
geographic sectors are most popular with investors in your country? 35
- Table 7: All answers to the question: Thinking of property funds, which
sector is currently most popular with investors in your country? 36
- Table 8: All answers to the question: Do your institutional/high net
worth clients get into the property investment market mainly for
opportunistic or defensive reasons? 36
- Table 9: All answers to the question: What is the most important barrier
to the development of onshore property funds? 36
- Table 10: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that onshore regulatory barriers hinder the
development of property investments onshore? 37
- Table 11: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that the regulators in my country haven' t done
enough to support the development of real estate investment trusts? 37
- Table 12: All answers to the question: What will most encourage the
development of the onshore property fund market? 38
- Table 13: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that the onshore market will never develop to
the extent that the offshore market is developed? 38
- Table 14: All answers to the question: What is the most popular
jurisdiction for the launch of property funds? 39
- Table 15: All answers to the question: Where have/will most property
funds in the UK be launched from in the last two years and in the next two
years? 39
- Table 16: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that real estate investment trusts have the
potential to rival corporate bond funds? 40
- Table 17: Three asset managers were considered to be the most prominent
in the French property funds market 40
- Table 18: Allianz Dresdner and Deutsche Bank are the key players in the
German property funds market 41
- Table 19: Only 11 asset managers were mentioned as players in the
Italian property funds market 41
- Table 20: Allianz Dresdner leads the way amongst Spanish asset managers
in its development of property funds 42
- Table 21: British asset managers named a wide range of competitors as
being among the top property fund builders in the UK 43
- Table 22: All answers to the question: Thinking of institutional
investors, what do you think will be the major barriers to wider take-up of
alternative investments in the next three years? 44
- Table 23: All answers to the question: Which is your biggest customer
group for the following products? 59
- Table 24: All answers to the question: In three years, which will be
your biggest customer group for the following products? 59
- Table 25: All answers to the question: For the following investments,
from which customer base will the most increase in demand come from in three
years' time? 59
- Table 26: Answers to the question: Which is the largest client segment
for the following types of property investments today? 60
- Table 27: All answers to the question: What do you think is the best way
for the following alternative investments to be distributed to mass market
investors? 60
- Table 28: All answers to the question: What do you think is the best way
for the following alternative investments to be distributed to high net
worth investors? 61
- Table 29: All answers to the question: What do you think is the best way
for the following alternative investments to be distributed to institutional
investors? 61
- Table 30: All answers to the question: In three years, which will be
your biggest customer group for property funds? 62
- Table 31: All answers to the question: Thinking of the next three years,
how do you think demand for alternative investments will change among
institutional investors? 62
- Table 32: All answers to the question: Thinking of high net worth
investors, what do you think will be the major barriers to wider take-up of
alternative investments in the next three years? 63
- Table 33: All answers to the question: Thinking of the next three years,
how do you think demand for alternative investments will change among high
net worth investors? 63
- Table 34: All answers to the question: Thinking of mass market
investors, what do you think will be the major barriers to wider take-up of
alternative investments in the next three years? 64
- Table 35: All answers to the question: Thinking of the next three years,
how do you think demand for alternative investments will change among mass
market investors? 64
- Market Context
- The European property fund investment landscape is diverse as tastes
vary between markets and client groups
- Growth in the European property fund market has increased steadily in
recent years
- Although the German property fund market has suffered, asset managers
are overwhelmingly confident of a recovery
- A fee structure encompassing both management and performance is most
suitable for property investment funds
- Over 60% of European asset managers believe that REITs were most
suited to a combined fee structure
- The combination fee is the most popular fee structure for open-ended
property funds in Europe
- The combined fee is believed to be the most appropriate structure for
closed-ended property funds among European asset managers
- There are clear country-specific trends in preferences for fee
structures in property funds
- A performance based fee structure is expected to become more common in
property investment
- Europe is the key property fund investment geography and mixed use funds
are most favored by European investors
- Europe is the most popular geographic area for investment and will
remain important over the next two years
- The option of investing in mixed use funds is most appealing to
investors
- Institutional client investment in property funds is more defensive
than HNW investment in the asset class
- Regulation and tax regimes are driving the offshore property funds
market' s challenge to the onshore market
- Regulation is the key barrier to onshore property fund development
- In each of the major European markets, the majority of asset
managers feel that onshore regulatory barriers hinder onshore property
fund development
- The majority of European asset managers believe their home
regulators could be more helpful in assisting the development of real
estate investment trusts
- Dismantling tax and regulatory barriers is the key to encouraging the
onshore property fund market in Europe
- European asset managers do not believe that the onshore property
investment market will offer the same range and complexity currently
available offshore
- The UK is currently the most popular jurisdiction for property fund
launches
- There will be a strong challenge to the dominance of onshore property
funds in the UK market
- European asset managers remain split on the potential of REITs to
rival corporate bond funds
- Outside of southern Europe, local players dominate the competitive
landscape
- French asset managers believe that ADi, AXA and Crédit Agricole are
the top property fund developers in France
- Deutsche Bank stands out in the German property fund market
- The Italian property fund market has a limited range of players with
very little seperating them
- Allianz is considered to be the leading developer of property funds in
the Spanish asset management market
- There are a large number of significant competitors in the property
fund market in the UK
- Lack of interest will be the greatest barrier to higher take-up of
property investments while demand is expected to increase
- A lack of interest and poor promotion of funds among institutional
clients will be the biggest barriers to wider take-up of property
investments among this group
- Data tables
- Customer Focus
- Property investment is most popular among institutional investors
compared to other client segments
- Institutional investors will still be the main force in the European
property investment market in three years' time
- Compared to other forms of alternative investment, property funds will
see significantly increased demand from the retail client segment
- Each customer base favors a different kind of property fund
- The advisory channel remains the primary distribution channel for
property investments across Europe
- Property investments are most likely to be distributed to mass market
investors through an independent financial advisor
- Over one third of asset managers believe high net worth clients
investing in property are best served by independent financial advisors
- Distributing property funds directly to insitutional clients is seen
as the most effective strategy for this client segment
- Institutional clients will become the most important client segment in
the property investment market
- Asset managers believe that demand for property investments among
institutional clients will increase by 5-10% per annum over the next three
years
- Low high net worth client interest in property investment is most
likely to hold the market back
- Demand for property investment is most likely to increase by between 0
and 5% per annum among high net worth clients
- A lack of interest in investing in or promoting property investments
is likely to prevent these products from becoming more popular among mass
market clients
- There will be a gentle increase in demand for property investments
among mass market clients
- Data tables
- APPENDIX
- Definitions
- Property Fund
- HNW
- Mass affluent
- Real estate investment trust (REIT)
- Methodology
- Further reading
- Ask the analyst
- Disclaimer
- List of Tables
- Table 1: Breakdown of Non-UCITS assets by category (excl. Ireland)
- Table 2: Answers to the question: What is the most appropriate fee
structure for REITs?
- Table 3: Answers to the question: What is the most appropriate fee
structure for an open-ended property fund?
- Table 4: Answers to the question: What is the most appropriate fee
structure for a closed-ended property fund?
- Table 5: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that fees linked to the performance of property
investments will become more common?
- Table 6: All answers to the question: Thinking of property funds, which
geographic sectors are most popular with investors in your country?
- Table 7: All answers to the question: Thinking of property funds, which
sector is currently most popular with investors in your country?
- Table 8: All answers to the question: Do your institutional/high net
worth clients get into the property investment market mainly for
opportunistic or defensive reasons?
- Table 9: All answers to the question: What is the most important barrier
to the development of onshore property funds?
- Table 10: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that onshore regulatory barriers hinder the
development of property investments onshore?
- Table 11: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that the regulators in my country haven' t done
enough to support the development of real estate investment trusts?
- Table 12: All answers to the question: What will most encourage the
development of the onshore property fund market?
- Table 13: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that the onshore market will never develop to
the extent that the offshore market is developed?
- Table 14: All answers to the question: What is the most popular
jurisdiction for the launch of property funds?
- Table 15: All answers to the question: Where have/will most property
funds in the UK be launched from in the last two years and in the next two
years?
- Table 16: All answers to the question: In your understanding or
experience of the property investment market, to what extent do you agree or
disagree with the statement that real estate investment trusts have the
potential to rival corporate bond funds?
- Table 17: Three asset managers were considered to be the most prominent
in the French property funds market
- Table 18: Allianz Dresdner and Deutsche Bank are the key players in the
German property funds market
- Table 19: Only 11 asset managers were mentioned as players in the
Italian property funds market
- Table 20: Allianz Dresdner leads the way amongst Spanish asset managers
in its development of property funds
- Table 21: British asset managers named a wide range of competitors as
being among the top property fund builders in the UK
- Table 22: All answers to the question: Thinking of institutional
investors, what do you think will be the major barriers to wider take-up of
alternative investments in the next three years?
- Table 23: All answers to the question: Which is your biggest customer
group for the following products?
- Table 24: All answers to the question: In three years, which will be
your biggest customer group for the following products?
- Table 25: All answers to the question: For the following investments,
from which customer base will the most increase in demand come from in three
years' time?
- Table 26: Answers to the question: Which is the largest client segment
for the following types of property investments today?
- Table 27: All answers to the question: What do you think is the best way
for the following alternative investments to be distributed to mass market
investors?
- Table 28: All answers to the question: What do you think is the best way
for the following alternative investments to be distributed to high net
worth investors?
- Table 29: All answers to the question: What do you think is the best way
for the following alternative investments to be distributed to institutional
investors?
- Table 30: All answers to the question: In three years, which will be
your biggest customer group for property funds?
- Table 31: All answers to the question: Thinking of the next three years,
how do you think demand for alternative investments will change among
institutional investors?
- Table 32: All answers to the question: Thinking of high net worth
investors, what do you think will be the major barriers to wider take-up of
alternative investments in the next three years?
- Table 33: All answers to the question: Thinking of the next three years,
how do you think demand for alternative investments will change among high
net worth investors?
- Table 34: All answers to the question: Thinking of mass market
investors, what do you think will be the major barriers to wider take-up of
alternative investments in the next three years?
- Table 35: All answers to the question: Thinking of the next three years,
how do you think demand for alternative investments will change among mass
market investors?
- List of Figures
- Figure 1: Real estate funds have seen steady growth since December 2004
- Figure 2: A combined fee was judged by European asset managers to be the
most appropriate for REITs
- Figure 3: Italian asset managers had the most wide-ranging views on REIT
fee structures
- Figure 4: Almost two thirds of European asset managers felt that the
combined fee option was best for open-ended property funds
- Figure 5: German and Italian asset managers were less likely to feel
that the combined fee structure was most appropriate for open-ended property
funds
- Figure 6: Over half of asset managers surveyed believed that the
combined fee structure was best suited to closed-ended property funds
- Figure 7: There was significant variation between different countries
over the degree to which the combined fee structure was most appropriate for
closed-ended property funds
- Figure 8: European asset managers are confident that performance fees
will become more widespread
- Figure 9: The preference for investment in Europe among property fund
investors is set to increase over the next two years
- Figure 10: Investing in a mixture of commercial, retail and residential
property was the most popular strategy among European investors
- Figure 11: Both institutional and high net worth investors were fairly
evenly split between defensive, opportunistic and mixed reasons for
investing in property
- Figure 12: Regulation is the most significant barrier to the development
of the onshore property fund market
- Figure 13: The majority of asset managers in each of the major European
markets feel that onshore regulatory barriers hinder the development of
onshore property investment
- Figure 14: European asset managers generally feel that the regulators in
their countries do not adequately support real estate investment development
- Figure 15: Giving tax advantages to onshore property funds would do most
to encourage the onshore property fund market
- Figure 16: There is limited belief that onshore property investment will
come to rival the development of the offshore market
- Figure 17: The UK was marginally believed to be the most popular
jurisdiction for the launch of new property funds
- Figure 18: The UK property funds market will see a dramatic shift
towards funds launched offshore in the next two years
- Figure 19: European asset managers have mixed feelings about the
potential of REITs to compete with corporate bond funds
- Figure 20: Insufficient interest among potential clients and
insufficient promotion of products are the biggest barriers to greater
take-up of property investments among institutional clients
- Figure 21: Asset managers expect the biggest increase in demand to come
from wealthy clients seeking REITs, however the main customer group will
continue to be institutional clients seeking property funds
- Figure 22: There is no dominant property investment vehicle in Europe
across all client groups
- Figure 23: Mass market investors are most likely to access property
investment via an independent financial advisor
- Figure 24: The independent advice channel is the most popular in Europe
for distributing property investments to high net worth clients
- Figure 25: The direct sales channel is by far the most popular among
European asset managers in terms of institutional investors
- Figure 26: Over the next three years the institutional client base will
become more important in the property funds market
- Figure 27: Asset managers are generally positive about the year on year
growth expected for property funds in the institutional market
- Figure 28: A lack of interest among high net worth clients will stand in
the way of property fund development in this client segment
- Figure 29: Asset managers were cautiously optimistic about the future
year on year growth in demand for property investment among high net worth
clients
- Figure 30: Low interest in property investment among mass market clients
will do the most to hamper growth in take-up in the near future
- Figure 31: A low year on year increase in demand for mass market
property investment is most likely to occur
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