Real estate managers raise record $225 billion in 2019

Real estate investment managers around the world raised a record US$225.8 billion in capital in 2019, with Asia Pacific vehicles accounting for $32.8 billion of the total. The figure for the region represents a sharp increase of 21.9% from the previous year ($26.9 billion), and it is the first time that capital for Asia Pacific has exceeded $30 billion mark. The findings were compiled in the Capital Raising Survey 2020, published by Anrev, Inrev and NCREIF. A majority of the capital that has been raised ($82.2 billion) will focus on European investment, while US$56.8 billion will go towards vehicles aimed at North America – a 7.5% decrease in volume from 2018. “Managers based in Asia Pacific displayed the strongest domestic bias, allocating 79.6% of the equity they raised to their home region,” Anrev said in a statement. “However, managers in the region have earmarked 13.8% to North American strategies – an indication of continued growing interest in real estate beyond Asia.” Meanwhile, European managers plan to invest 76.9% of the capital raised within the continent, 11% into global strategies, 7% in Asia Pacific and 5.1% in North America. Of the new capital raised in 2019, 61% was invested before the end of the year, which leaves 39% to be deployed amid a challenging economic environment due to Covid-19. “The Covid-19 crisis has put the global economy on a drastically different course and will no doubt prompt strategic reappraisal and asset revaluation,” said Amélie Delaunay, director of research and professional standards at Anrev. “With capital still left to be deployed, the question for real estate fund managers will be how best to put these funds to use at a time of unprecedented upheaval,” added Delaunay. “The impact on the real estate industry is yet to be fully seen, but as an asset class, it remains an important component in long-term investors’ portfolio and source of diversification.” © 2020 funds global asia

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