More than three quarters of advisers expect to increase allocation to real estate over the next year in a bid to de-risk portfolios.
Research from Time Investments also found more than half said their average client’s target allocation to real estate is 11-15 per cent.
The survey spoke to 200 UK wealth managers, financial advisers, and investment professionals with clients who hold more than £200,000 of investible assets.
Roger Skeldon, head of real estate at Time, said: “Our research shows that advisers and investment professionals are increasingly positive towards real estate, with allocation to the asset class set to increase over the coming quarters.
“This is being driven by factors which provide a counter to the current turbulent economic climate but also an increased focus on ESG.”
Overall, 68 per cent of respondents said the key factor in the move to real assets was the desire to de-risk portfolios through diversification, while 61 per cent said it was a focus on ESG.
Almost half said it was a desire for secure income streams or defensive investment strategies.
Data centres and logistics were the most attractive for the group, while student accommodation and supermarkets were seen as the least favourable.
Skeldon added: “As real estate asset management experts, we continue to focus investment in sectors with stronger rental growth, including in our favoured ‘Beds, Meds and Sheds’ cohort, with long-term demand drivers.
“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.
"Sectors with long-term demand drivers such as data centres have continued to attract investment and strategic partnerships to add to expansion capacity.”
tara.o'connor@ft.com
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