• Tue. Jun 21st, 2022

Growing focus on the social benefits of real estate investments

More than half (58%) of UK pension plans believe institutional investors will increase their allocation to real estate investment vehicles with a social benefit, while only 5% expect this to decrease, according to a study by ‘Alpha Real Capital.

The survey also found that more than three-quarters (79%) of UK pension schemes viewed social benefits as ‘very important’ to the decision-making process when evaluating new property investment allowances.

Indeed, 40 percent suggested that social considerations are the primary objective when assessing the environmental, social and governance (ESG) characteristics of real estate investments, while 47 percent placed them as a secondary objective in this. group.

The pandemic was highlighted as a key factor in the growing attention to social real estate, as 66% of UK pension plans agreed it has increased the level of importance of social benefits on decision-making. investment and allocation of funds in the future.

Alpha Real Capital’s head of social real estate, Adrian D’Enrico, also suggested that the pandemic has highlighted the benefits of diversifying social real estate, with the underlying income proving to be resilient compared to to the main sectors of commercial real estate.

“This is an opinion with which 91% of the pension plans we surveyed said they agreed, and four in ten said they“ strongly ”agreed,” a- he declared.

“The main reason for the strong performance of the sector during the crisis is the essential nature of both the housing provided and the services provided from the assets. In addition, rents are often supported by public sector funding, and there is a strong structural imbalance between supply and demand.

“We estimate that the UK social housing sector needs at least £ 50 billion in new funding to fill a huge gap in modern and efficient housing, education and healthcare.

On top of that, Anthony Curl, Co-Head of Long Income at Alpha Real Capital, said: The recent tough times.

“This, combined with the huge social benefits of investing in housing, healthcare and education, helps explain why our research shows UK pension schemes are so positive for investing in social real estate. “