The 14th annual edition of the ALFI Real Estate Investment Funds Survey showcases the resilience and growth of the real estate investment sector in Luxembourg.
2020 marks yet another outstanding year for the real estate asset class. With 449 vehicles surveyed (the highest ever), the 14th ALFI REIF Survey continues to provide a mature view of this market segment and the tendencies that, year on year, impact the industry. It can now be safely confirmed that the launch of the RAIF regime and the revamping of the Partnership regimes in Luxembourg were a recipe for success and perfectly answered the needs of the market and investors.
With the majority of REIFs investing in Europe and promoted by EU investors, the survey provides clear evidence that Luxembourg funds are the mainstream solution to set up and manage EU Real Estate investment strategies. The success, however, spans further into other geographical areas, which can be witnessed by the increase of REIFs that are investing in North America, for example.
Other topics and findings of the research were:
The ALFI REIF Survey attempted to provide an initial outlook of the impact on the REIF industry arising from COVID-19. Whilst the results may seem promising (e.g. out of the whole 449 funds surveyed, only one fund temporarily suspended in 2020, 11 funds admitted to having had large redemptions in 2020, 11 funds surveyed indicated that redemptions were temporarily suspended and 4 funds activated deferred redemptions/gates) ALFI will keep monitoring the effects of this global crisis.
The Grand Duchy is uniquely positioned to benefit from this growth. As the survey indicates, asset managers view Luxembourg as an attractive hub for REIFs. Its toolbox, the wealth of expertise across the ecosystem and the role of the regulator are all factors that contribute to Luxembourg’s success in this segment.