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UK institutions trim property exposure

UK – Institutional investors such as pension funds and insurance companies decreased their exposure to property by £689m (€1,088m) during the first quarter of this year according to new figures from DTZ Research.

The report says the decline is only the third time since 1996 that quarterly results have shown a negative investment level for property and the activity over the last four quarters taken as a whole remains above the long-term average.

DTZ says the significant fall in equity prices in the last 18 months has seen real estate weightings in the portfolios of some funds reach the top end of their target range. The declines in overall property investments is a reflection of this, as institutions attempt to limit their exposure to the asset class.

Says a spokesman for DTZ: “The first quarter this year saw purchasing levels fall to their lowest point since 1995 and higher than average sales. Pension funds and insurance companies are now looking to limit their property weightings to ensure they don’t exceed their targets.”

“This is a knock-on effect from the declines in the stock markets, as investors initially increased their exposure to asset classes other than equities to protect returns,” he adds.

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