“Moderate” continues to be the preferred risk strategy in Q3 2020, with an 11% year-on-year increase. Interestingly, the shift has been from the low risk into the moderate risk category, a direct move which has been particularly noticeable between Q2 and Q3 2020. There has also been a slight increase in preference for high risk strategies.
Declared “risk appetite” has also increased, by 8% year-on-year.
Europe is the preferred focus of more and more investors, with each of the other regions seeing a small year-on-year decline in share of intended investments.
In terms of asset class preference among investors, retail has decreased decidedly in popularity, while residential and industrial have seen minor increases. All this is unsurprising, in the context of the COVID-related confinements almost everywhere in the world this year. What is surprising is a relatively significant increase in popularity of hospitality assets: 19% year-on-year.
This may link back to the increase in investors declaring a stronger appetite for risk – that is, it may indicate investors taking an opportunistic stance. A number of recent deals involving distressed hospitality property portfolios have indicated a view among certain parties that investment in the sector will likely pay off in the medium to long term. Whether this reflects confidence that the tourism market will fully recover post-COVID, or plans to transform these discounted assets into other asset classes for which demand is grown - for example student or retirement accommodation - remains to be seen.
Certainly, the number of investors indicating their interest in opportunistic strategies has doubled since Q2; and this increase is reflected among investors across all countries.
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About the BrickVest real estate investment barometer
BrickVest brings together real asset developers, investors and lenders within a digital marketplace. More than 7000 investors and 1100 real estate firms use our services. The BrickVest barometer is a quarterly aggregation of the data gathered by BrickVest from surveying investors registered on our platforms. The barometer reveals and tracks investor sentiment regarding the real estate investment market, including risk appetite, preferred locations for investment, investment objectives and more. In Q2 2020, the questionnaire and collection method both evolved slightly: notably asset class preference was added and only vetted professional investors were polled.