Happy holidays. With great pleasure, the SHURE Initiative releases the results of its formal and thorough, first-ever global investor sentiment survey.
**Unlock Insights from 269 Respondents**
Between December 10 and December 20, the SHURE Initiative engaged with 269 investors and developers across Canada, the U.S., the U.K., the Eurozone, and Australia.
For those who participated, thank you!
For those who may not be familiar with SHURE, it stands for the Student Housing and University Real Estate Initiative. Our mission is clear: to bridge the gap between executives in post-secondary planning and real estate investors across the globe.
The survey was prudent for SHURE to conduct in light of the significant changes occurring worldwide—from recent shifts in U.S. politics to the ongoing instability in regions like Ukraine, East Asia, and the Middle East—investors are navigating a complex landscape filled with crucial questions about the future.
On a positive note, easing inflation will enhance prospects for investors and developers in 2024. At the same time, the interest rate environment of the 2007-2020 cycle may be a thing of the past.
But what are investors in the modern world honestly thinking? This survey was completely anonymous, so we were able to capture good answers.
It’s important to note that SHURE’s principals are involved in research, media, and real estate investment businesses. Due to our exposure to various sectors, we are uniquely positioned to conduct this survey. After reviewing the many responses, we are reminded of a quote from Former United States Secretary of Defense Donald Rumsfeld in a press conference before the invasion of Iraq in 2003. Rumsfeld famously said there are “unknown unknowns.”
Specifically, Rumsfeld said, “Because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know, we don’t know.”
Given the unique political changes around the world, combined with a rapid acceleration of AI in business applications, Rumsfeld’s statement could apply to investor sentiment heading into 2025. Candidly, we could be in for some significant changes, but there are knowns – and there are unknowns.
Our results found that investors view the opportunities quite differently. The one issue they agree on is that the prospect of tariffs in the new Trump administration is the biggest or ‘perceived significant challenge.’
Let’s take the results to our first question.
Have you deployed more capital in 2024 than you did in 2023?
- 37.21% of respondents answered “yes”
- 34.88% of respondents answered “no”
- 16.95% of respondents answered “about the same”
- 10.96% answered “I don’t know or unclear”
SHURE’s takeaway:
Only slightly more than 1/3 of investors deployed more capital in 2024 vs 2023, with almost the same percentage saying they did not. This answer speaks for itself. Our best conclusion is that most investors were either on the sidelines, laying low, or just cautious about investment opportunities in 2024.
In question #2, SHURE asked if “the fundraising environment is poor, favorable/positive, or neutral in 2024?”
- 36.59% of respondents said the fundraising environment was “favorable, more positive than 2023.”
- 34.15% of respondents said the environment was “neutral or about the same as 2023.”
- 19.51% of respondents said the environment for raising capital was “poor and more challenging than in 2023.”
- 9.76% of respondents said they didn’t know or were uncertain.
SHURE’s takeaway:
Despite easing inflation and lowering interest rates in Canada, the U.S., and other Western nations, 1 in 5 investors said the fundraising environment was “more challenging than 2023.” While 36.59% said the fundraising environment was more favorable, 34.15% also said it was “about the same.”
Despite the slight improvements in the lending environment, there is likely a significant lag in seeing any real change or optimism in the ability to raise capital.
In question #3, we asked about the interest rate environment improvements in 2024, specifically if recent cuts had “improved your ability to acquire real estate?”
- 46.34% of respondents answered “yes,” meaning the interest rate environment in 2024 had improved their ability to acquire real estate compared to 2023.
- 24.39% said the environment is similar to what it was during this period in 2023.
- 19.53% answered “no”
- 9.74% answered “unknown/uncertain.”
SHURE’s takeaway:
SHURE Initiative works in multiple countries, so we have heard from many worldwide on this issue throughout the year. Each country has modified rates on its terms, some unexpectedly. Further, the modern world is not necessarily in lock-step about rate cuts. In the U.S., the Federal Reserve cut interest rates three times in 2024: 50bp in September, 25bp in November, and 25bp in December. The Bank of Canada cut benchmark borrowing costs five times in a row by 175 basis points in a space of six months in 2024, making it the only major central bank to have reduced borrowing costs at such a rapid pace. The ECB (European Central Bank) cut rates four times in 2024. The Bank of England cut rates two times in 2024. Australia, meanwhile, did not cut rates in 2024. Japan was the only modern country to increase its borrowing rate in 2024.
Less than half of our respondents, 46.34%, said the lower cost of debt had improved their ability to acquire real estate. 43.9% said the debt environment to end 2024 was similar to 2023 or had not improved their ability to acquire real estate. We conclude that while rate reductions are good news, the impact on the market is not immediate and will take longer, as evidenced by your answers—moreover, many countries’ central banks are expected to slow their rate cuts in 2025.
We will unveil the results of the following survey questions in our SHURE Member-Only section:
1- Did you sell/exit more deals in 2024 vs 2023?
2- Have your overall operating costs increased more than inflation, less than inflation, or about the same?
3- Do you plan to increase your overall LTV in acquisitions next year?
4- What is the most significant or perceived challenge going into 2025?
5- If you invest in multiple asset classes, is your real estate allocation increasing or decreasing?
6- In the real estate arena, what’s your first, second, and third preferred asset class today?
7- If you plan to invest outside of your home country, where do you plan to invest?
8 – What type of investor are you?
9- How many assets are under your management?
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SHURE stands for the Student Housing and University Real Estate Initiative, a global association created to unite leaders in post-secondary education and student accommodation. Our mission emphasizes the ecosystems within higher education and surrounding communities, highlighting the importance of academics, food services, transportation, and housing in student life and institutional effectiveness.
**Join the SHURE Membership today and connect with global innovators for just $39!**
The SHURE Initiative Membership is the most comprehensive resource for university planners, C-suite executives, and property technology leaders to share global best practices and strengthen business relationships. >> https://shure.international/product/shure-premium-membership
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