The asset class Real Estate does equity or debt investments in real estates. That includes residential estates, commercial property and special property. Commercial property consists of hotels, production and office facilities. By special properties one can think of infrastructure, recreation and cultural facilities.
The advantages of owning a property are quite obvious. On the one hand one can participate in an increase of the properties value that gives some sort of inflation protection. On the other hand one receives periodic rents. Hence, there is right from the beginning a periodic payback that makes it quite interesting for investors who rely on that.
The universe of investments ranges from already established properties with tenants to new buildings and property development. However, even already established properties produce some sort of costs like maintenance and renovation. The location of the property is also quite important. A recession in a region can lead to lower property prices and overdue rents while a boom in a region can lead to higher property prices and the possibility to ask for higher rents. The expected returns on Real Estates investments rely mostly on the investment strategy, underlying assets and risk profile of the investment. Thus, one cannot give a precise target IRR for this asset class.