Despite global economic uncertainties, the industry real estate funds it remains a solid and growing sector. Investors continue to see real estate funds and REITs as a safe and profitable investment opportunity, capable of withstanding global market turbulence and offering stable returns. This is highlighted by 44th Report 2024 on “Real estate funds in Italy and abroad”, carried out by Scenari Immobiliari in collaboration with Studio Casadei, according to which the assets of listed and unlisted funds and REITs globally reached 4,650 billion euros at the end of 2023, recording an increase of 4.5% compared to 2022. this total, REITs represent approximately 76% of total assets.
“The scenario emerging for 2024 is decidedly more positive, – he claims Mario Breglia, president of Scenari Immobiliari. – Investors will be able to count on a less chaotic picture regarding prices and a downward direction of monetary policy. Additionally, real estate market fundamentals remain strong with supply and demand stable, if not growing across most asset classes. The big international players think that 2024 will be a ‘year of action’, after a ‘break’ in 2023. There is a need to refinance, renew products and balance portfolios. A strong recovery is expected for 2025, but the signs are also positive for the current year, where we expect an increase in managed savings in real estate globally of no less than five percent”.
Real estate funds are growing in Europe
There expansionary phase of real estate funds it also involved Europe, where the number of funds and assets managed have grown. In Europe, 1,973 funds and 276 REITs are operational, with total assets of 1,600 billion euros, marking an increase of 4.6% compared to the previous year. The European share of world heritage remained stable at 34.4%, but in absolute terms the volume increased, confirming a positive cycle that has lasted for years. At the end of 2023, assets managed by the eight main European countries reached 943 billion euros, slightly lower than the 946 billion of the previous year. In the last ten years, the assets have almost tripled, with around two thousand active real estate funds.
In Europe, Germany continues to dominate the rankings by size of assets managed, followed by Luxembourg, France and Italy. The latter reached assets of 114 billion euros, with an average performance of 1.9%, slightly lower than the European average of 2.2%.
The positive trend of Italian real estate funds
According to the report, the Italian real estate fund sector, which represents over 12% of the total European vehicle inventory, continues to record a strong growth trend. The NAV (Net Asset Value) at the end of 2023 reached 114 billion euros, with an increase of 8.6% compared to the previous year. The real estate assets held directly by 60 SGRs (Savings Management Companies) and 640 active funds reached 131 billion euros, marking an increase of 6.5% compared to 2022. The forecasts for 2024 indicate a further increase in NAV by 5.3% and assets by 4.6%, with the number of vehicles potentially reaching 660 units.
“The 2024 will be an ideal year for value-add investments”, – he underlined Francesca Zirnstein, general director of Scenari Immobiliari. “The path towards a more sustainable real estate finds support from investors willing to take on greater risks in exchange for higher returns. The drop in inflation brings attention back to the more modern office sector and living is the asset class where the greatest attention of international operators is concentrated. In summary, all real estate is expected to grow in 2024. Fund assets continue to be divided between core investments, the world of pragmatic portfolios, with good employment, decent returns, market rents, and the world of value-added investments, which become prime, high-quality properties, with excellent location and high prospective rents. Both can enjoy solid cash flows and the backing of long-term contracts. In Italy we can observe how the asset allocation of managed assets has seen the weight of the various sectors vary, with growth in residential and logistics. The prospects for 2024, based on the indications collected among the asset management companies that participated in the creation of our Report, are of cautious optimism, with an increase in assets under management and diversification of portfolios compared to the current composition”.
