According to Philippe Tannenbaum, director of research at Eurohypo in London, predicting a volume of investment from the sovereign funds requires two data streams to be analysed: the flows (which of annual new investment might be directed toward property), and the stocks (the target proportion of real estate within the assets under management). In a five-year investment period, with a combination of sustained rapid growth of the assets under management and of high targets for the property included in them, the annual investments would represent about 40% of the actual global direct investment.
| Forecasts for sovereign wealth funds’ investments in real estate* (All figures: $ bln) | |||
| Example 1: the existing assets increase of more or less 10% per year [1] | Example 2: $12,000 billion in 2015 | Example 3: $12,000 billion in 2012 | |
| Approach through flows | |||
| Compounded new investment per year, all sectors mixed | 430 | 1,100 | 1,800 |
| Out of which real estate | |||
| Scenario 1: 5% of the new investments | 21 | 55 | 90 |
| Scenario 2: 7% of the new investments | 30 | 77 | 126 |
| Scenario 3: 12% of the new investments | 52 | 132 | 216 |
| Approach through stock | |||
| Target of 5% of assets under management within 5 years | 48 | 85 | 120 |
| Target of 7% of assets under management within 5 years | 68 | 119 | 168 |
| Target of 12% of assets under management within 5 years | 116 | 204 | 288 |
| Source: Eurohypo Research | |||
| [1] That is: reinvesting the profits, no new money place into the funds. Gives an approximate size of $5 billion in 2012 and $6.5 billion in 2015 | |||