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Alternative Market Briefing

Global real estate fundraising sets new record in 2019 at $151bn

Tuesday, January 14, 2020

Laxman Pai, Opalesque Asia:

The global real estate fundraising exceeded $150bn for the first time in 2019, says a recent study by the research firm Preqin, as the 295 funds have reached a final close through the year secured a collective $151bn.

"Real estate fundraising hit a new high in 2019, surpassing the high-water mark of $148bn set in 2008," said Justin Hall, Head of Real Estate at Preqin. "Concerns of a potential market slowdown have led investors to commit more capital to alternative assets, and real estate has benefited from a huge influx of capital in the past five years."

While impressive amounts of capital were raised, the number of vehicles reaching a final close declined sharply. In 2019, only 295 funds closed, which means funds are getting larger - the average size of funds reached $625mn.

Fund managers have capitalized on that success, bringing a record number of funds to market. At the start of 2020, there are 918 real estate vehicles seeking a total of $281bn from investors.

But even as fundraising has hit new highs, dealmaking has stuttered. The year saw substantial activity, with 9,300 deals announced worth a combined $410bn. But this does not match the record year seen in 2018 when almost 9,800 deals were recorded with a total value of $457bn.

In a positive sign for fund managers, they did manage to deploy significant amounts of capital, and dry powder actually decreased slightly from $331bn at the end of 2018 to $319bn a year later.......................

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