Family offices continue to increase real estate exposure...
2018 saw a resurgence in global family offices allocating to the real estate sector. According to the most recent UBS Global Family Office report, 17% of the average family office portfolio is comprised of real estate investments. These investments span both residential and commercial projects, yielding a 12% return on average. This increase spanned all continents - while those domiciled in Europe showed a larger inclination to allocate to the space. Additionally, European family offices were more open to investing internationally than their North American and Asian counterparts.
Nevertheless, the data shows that family offices are preferential to local investments when it comes to their real estate assets. This is likely due to the physical nature of these investments and the families’ comfortability within the local market. Additionally, real estate projects make up the majority of families' direct investment and co investment activities.
Look for real-estate allocations to continue to rise within the family office space. The real estate asset class offers tremendous returns, a tangible investment, an avenue to invest responsibly, and the ability to work alongside other families - while offering a cleaner due diligence process compared to other direct investment options.
As always, please connect with us for additional insight on the global family office space.