The risk appetite of property investors is set to rise in 2011, which will lead to more global property investment and a general outlook that will extend beyond core property, according to AMP head of property funds management Chris Judd.
“In 2011 we will see further investment in core real estate but I expect risk appetites to increase and that could come through a number of ways,” Judd said.
“It could be through investment in opportunistic funds and core plus funds that would literally up the risk curve domestically, or alternatively through investing offshore,” he explained.
“That’s been a theme in the wholesale space that has been put on the backburner for the past two years and I’d expect over the next 12 to 24 months we’ll see an increased allocation to offshore real estate.”
AMP director and chief investment officer property Andrew Bird said the strength of the Australian dollar currently meant a lot of investors who did not have an allocation to global property before the global financial crisis might be considering it now.
He added an increase in offshore real estate investing could be a long-term trend.
“I think the long-term trend in Australia is property investing has to go offshore because with compulsory super, and if that goes from 9 to 12 per cent, there is still not enough property investment opportunities in Australia,” Bird said.
“So, long term, that fundamental will have to apply,” he said.
