**Telecommunications, Healthcare, and Office Sectors Gain Ground in Active Real Estate Fund Allocations**
Actively managed real estate investment funds continued to adjust their sector allocations during the first quarter of 2025, with a notable shift toward telecommunications, healthcare, and office properties, according to a recent report by Nareit. Self-storage also performed strongly during the quarter.
Telecommunications emerged as the most overweight sector relative to its index weight, with allocations reaching 132% of its index share. It held the second-highest allocation overall, trailing only the residential sector. Healthcare posted the largest year-over-year increase among all sectors for the second consecutive quarter and ranked third in overall fund allocations.
The office sector showed significant improvement, with allocations rising to 72% of its index share—up markedly from just 48% in the first quarter of 2024. Meanwhile, self-storage regained momentum, rebounding to near its index weight within the funds.
Residential continues to lead as the top investment focus, comprising 16.9% of actively managed fund allocations. It was followed closely by telecommunications at 16.3%, and healthcare at 15.9%.
These shifts reflect strategic rebalancing by fund managers seeking growth and stability across evolving property sectors.
