Abu Dhabi – Mubasher: The Abu Dhabi Investment Authority (ADIA), the sovereign wealth fund (SWF) affiliated to the government of Abu Dhabi, has topped the world’s top 10 investors in real estate.
ADIA’s property portfolio has surpassed $62 billion, representing around 7.5% of the fund’s assets under management (AUM), Indosuez Wealth Management said in a research note.
“Real estate assets have helped provide a steady and diversified income stream to institutional portfolios as well as providing yield in the context of a low interest rate environment," commented Indosuez senior real estate analyst Victoria Scalogne.
ADIA excelled over the Netherlands ABP fund and Germany’s Allianz, both of whom have a real estate portfolio of around $48.1 billion, the research firm reported, citing data by IPE Real Assets
In 2017, ADIA logged a rise in annualised rates of return, reaching 7% from 6.9% the year before. Meanwhile, the Abu Dhabi fund’s 20-year annualised rate of return increased to 6.5% in 2017 from 6.2% in 2016.
"Not only have large institutional real estate investors become more ‘global’ in origin, they are investing more ‘globally’, as can been seen by the amount of cross-border investment,” Scalogne added in the note.
Despite ADIA’s performance, sovereign wealth funds from the Middle East represent only 25.9% of the top 10 real estate AuM, the lowest in the list.
European and North American pension fund managers top the list, representing 45% of the top 10, whereas European insurance firms come in second with 29.5%, the report indicated.
"SWFs from the Middle East have helped diversify their economies away from oil and invest in a wide range of non-oil related assets. Emerging market institutional investors have become more prominent real estate investors in the global arena in recent years helped by a growing middle class (and wealth) in large swathes of the emerging world," Indosuez’s senior real estate analyst highlighted.
