Institutional investors are reassessing their exposure to real estate as private markets evolve. After a post-pandemic recovery, property markets have softened, prompting a shift in allocations. For the first time in over a decade, 2025 saw a reduction in target allocations to real estate, with capital moving toward infrastructure and private credit.
Around 60% now see infrastructure and private credit as direct competitors to real estate, particularly in EMEA and APAC. Equity real estate is being asked to compete more clearly on risk and return, and to prove its relevance in a more competitive allocation environment.
As capital becomes more expensive and risk tolerance tightens, real-estate debt is delivering higher yields with better downside protection. In many cases, returns are now exceeding those from equity strategies. This has flipped the traditional risk-return profile and is pulling more capital toward private credit within the real-assets space.
Real Estate Credit Investments Limited (LON:RECI) is a closed-end investment company that specialises in European real estate credit markets. Their primary objective is to provide attractive and stable returns to their shareholders, mainly in the form of quarterly dividends, by exposing them to a diversified portfolio of real estate credit investments.
