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Investors continue to show strong interest in private real estate despite uncertainty surrounding interest rate trends, inflationary pressures and geopolitical issues. According to PERE's full-year 2023 investor report, allocations to private real estate increased across all institutions, with the average allocation increasing from 7.21% in 2022 to 7.97% in 2023.
Indeed, investor demand for the asset class remains strong in 2024. 39% of investors plan to increase their capital investment in private real estate, roughly in line with the 38% who were underinvested in real estate in 2023. Meanwhile, while 38% of investors overinvested in 2023, only 27% expect to reduce their capital investment in 2024. 35% of investors planned to keep their investment amount constant.
North American investors were the most active investors in private real estate last year. The New York State Common Retirement Fund invested in 19 funds across North America across a variety of strategies and is best known for investing in private equity real estate vehicles. Meanwhile, the California Public Employees Retirement System is known for making the largest investment in a private equity real estate closed-end fund in 2023. This included a $1.5 billion check for Blackstone's Blackstone Real Estate Debt Strategies V and $1.15 billion for Digital Bridge's real estate tech vehicle DCP C Strategic Partners.
Download the full report PDF here and the data here .