Latest analysis from CBRE Research, in conjunction with PropertyMatch, shows that investors buying in the secondary real estate fund market are well-placed to outperform those buying direct. According to the report, there are several benefits achieved by buying on the secondary market that are proven by the data analysed to drive better performance.

The CBRE analysis shows that trading via the secondary market invariably offers a cheaper entry point than the primary market, where a premium of up to 6% to NAV will often be paid. Analysis of CBRE’s secondary trading platform, PropertyMatch, shows investors have saved an average of 6.11% against the price that would have been paid on the primary market.

Additionally, investors can often deploy capital more quickly on the secondary market, receiving funding performance faster than would be the case if they entered a queue on the primary market. For a typical long income fund for example, queues can be as long as 12 months, equating to an average of 9% of ‘missed performance’.

Such are the pricing and queue-jumping advantages of secondary market transactions, that even against a targeted investment strategy with perfect foresight that only invested in the best performing funds over that period, the analysis shows that a secondary market investor can out-perform a direct investor by ~1% on a rolling three-year based on investing in the first secondary transactions that are immediately available.