Some 77% of investment professionals expect to allocate more money to real estate over the next 12 months, leading to expectations of an increase in demand for property.

The prediction comes from Time Investments after it researched 200 UK wealth managers, financial advisers and investment professionals who have clients with more than £200,000 invested.

More than half (58%) of respondents said that for the average client, the target allocation to real estate is 11-15%, and 26% said 6%-10%. 

When asked what is driving allocation to real assets such as real estate, the key factor cited by respondents was the desire to de-risk portfolios through diversification (68%), increased focus on ESG (61%), a desire for secure income streams (45%) and defensive investment strategies (44%).

In terms of the real estate sub-sectors, respondents felt industrials offered the biggest investment opportunities over the next 12 months, followed by data centres and logistics with student accommodation and supermarkets regarded as the least favourable.

Roger Skeldon, head of real estate and fund manager at Time, said: “Advisers and investment professionals are increasingly positive towards real estate. This is being driven by factors which provide a counter to the current turbulent economic climate but also an increased focus on ESG.”

He said as a fund manager the firm focuses investment in sectors with stronger rental growth. He said sectors such as student accommodation continue to see a favourable supply/demand imbalance, which could allow large operators, especially with development pipelines, to continue to grow their businesses.

He added: “Sectors with long-term demand drivers such as data centres have continued to attract investment and strategic partnerships to add to expansion capabilities.”

Time is part of the Alpha Real Capital Group, which encompasses Alpha Real Capital LLP (AlphaReal) and Time Investments. AlphaReal is a specialist real assets investment manager focused on secure income strategies. Time is the group’s authorised wealth management investment solutions arm. The group has a 180-plus strong professional team and £4.5bn of assets under management.

• Time Investments commissioned research conducted by Pure Profile in September 2023 with 200 UK wealth managers, financial advisers, discretionary fund managers, fund selectors and investment analysts, 68% of which work for firms with £100m - £1billion AUM and have clients with minimum investible assets of £200,000.