Real Estate Funds Have Beat Inflation – Research by The Alliance Fund Reveals

19 January 2023 - 12:20 pm

Market analysis by Alliance Fund, the end to end real estate fund, looked at 46 of the nation’s most prominent real estate funds to reveal which has seen the largest annual rate of growth, as well as which are offering the best returns to investors.

Their analysis has revealed that the average property investor utilising real estate funds as an avenue of investment has seen a return of 11.5% in the last year, with the nation’s most prominent funds sitting on an average net asset value (NAV) of £1.3m, having seen growth of 11.1% on an annual basis.

According to the Association of Real Estate Funds index, many funds have outpaced inflation.

Real estate funds come in all shapes and sizes, allowing for collective investment from numerous investors which are pooled together to purchase real estate assets, most commonly residential and commercial real estate.

This collective approach to real estate investment offers a number of advantages including the ability to spread risk, access to a greater diversity of portfolio opportunities and the foundation of professional fund management providing a more secure, hands off approach.

Currently, the average fund size across 46 of the nation’s most established real estate funds sits at £1.27bn, with M&G Secured Property Income Fund sitting on approximately £4.67bn, according to Alliance Fund.

According to the Chief Executive of Alliance Fund, Iain Crawford, although all investments carry an element of risk, the average return provided when investing in a real estate fund has been robust.

“From residential developments, to retail outlets, warehouses, sports grounds, listed buildings and everything in between, real estate funds provide the opportunity for investors at all levels to create an incredibly diverse, bespoke portfolio while minimising risk in the process”

“There are already some firmly established funds out there, but we’re also seeing the evolution of this avenue of investment, with many challenger funds bringing something new to the sector”.

“Alliance Fund is just one such fund disrupting the sphere of real estate fund investment as, unlike many traditional funds, we do not invest fund capital into third party investments.

We take an end to end approach by investing only in activities that we control, allowing us to reduce risk as the funder, developer and constructor”

Iain Crawford, CEO Alliance Fund