Investors had “confirmed that real estate is now viewed as a distinct asset class and is increasingly being incorporated separately into strategic asset allocation,” according to MSCI and S&P.

Specifically, real estate is typically bought for its yield and as a real asset, whereas banks are more volatile and act cyclically.

Additionally, Greenwich Associates has found that institutional investors are driving the build up in the real estate space, with half of pension consultants recommending clients to raise weights in listed real estate as a way to diversify their portfolios. REITs have shown lower correlation to the broader equities market and they provide some inflation protection. [REIT ETFs for Income Generation and Diversification]

According to MSCI data, real estate assets would have been the third-strongest performer of the 11 GICS sectors in developed economies, behind information technology and consumer discretionary sectors, since March 2009. In the U.S., listed real estate companies have quadrupled since the financial crisis low while the S&P 500 index tripled.

For more information on real estate investment trusts, visit our REITs category.

Max Chen contributed to this article.