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Alternative Market Briefing

2018: Stellar year for private real estate funds

Tuesday, February 26, 2019

Laxman Pai, Opalesque Asia:

Driven by strong fundraising and deal activity, 2018 has proven to be a stellar year for private real estate. The fund managers and investors alike are positive about the asset class in 2018, said a study.

The 2019 Preqin Global Real Estate Report found that fund managers had a good year, with 2018 marking the sixth consecutive year in which they raised more than $100bn.

The vast majority of investors surveyed by Preqin felt the performance of their real estate investments met or exceeded their expectations through the year, and 2018 marked the fifth consecutive year in which distributions have exceeded capital called up.

The total assets under management hit to a record of $909bn as of the end of June, it said.

High asset valuations and competition for deals have led two-thirds of fund managers surveyed to lower their targeted returns, and a large proportion of investors expect their 2019 returns to be lower than they were in 2018, Preqin said.

"Private real estate had another stellar year: fundraising levels remained strong, real estate outperformed public indices as well as other private capital strategies, and capital distributions outstripped capital called up. So, it's unsurprising to see that investors and fund managers report satisfaction with the asset class," Tom Carr, Head of Real Estate said.

"However, real estate is facing a more challenging road ahead. Competition is intensifying, and i......................

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