Superannuation asset allocation towards listed and unlisted real estate has steadily increased since 2013.
Retail funds have the highest exposure to GREITs, aging demographic profiles of several non- retail funds is expected to increase the demand for listed real estate over unlisted.
GREIT managers have experienced exponential growth since GFC, active managers dominate the top 10 lists by assets.
Unhedged GREIT strategies have benefited from weak Australian dollar, adding 3.3% and 1.8% p.a to investor returns over the past 12 and 36 months, respectively.
The average correlation of manager excess returns is low however rising cost of capital and geopolitical uncertainty is likely to drive correlation higher going forward.
The data-set on GREIT manager performance suggests that investors need to be cautious when selecting active managers in this asset class.
To realise positive, net of fee alpha, investors need to select highly active, skilled managers that can deliver first quartile alpha.
