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Laxman Pai, Opalesque Asia: 2022 is proving to be far more turbulent for the global real estate market than many initially expected, said a study.
According to Q2 2022 Real Estate Quarterly Report by Preqin, investors have had a rough ride, with many risk assets delivering negative returns - notably including those previously viewed as being lower risk.
Preqin analysts note fundraising has weakened further, compared to Q1 2022. Based on the first cut of data to Q2 2022, the amount of capital raised ($26.2bn) has fallen by almost a third (32%) quarter-on-quarter ($38.7bn in Q1), and 11% year-on-year ($29.5bn in Q2 2021).
In comparison, only Q3 2020 was worse from a fundraising perspective, during the pandemic, it added.
"Real estate was among the worst-hit asset classes during the pandemic and the subsequent upturn. It took several quarters for the activity to hit previous levels and it is looking likely that rising rates could put a halt to that short-lived recovery," the report noted.
Investors shunned higher-risk strategies in Q2 2022 while in Q4 2021, we saw a surge in funds closing, particularly opportunistic funds, Preqin said. This trend was evident on a smaller scale in Q1 2022 and petered out in Q2 2022.
Meanwhile, real estate debt strategies attracted the greatest quarterly inflows ($7.7bn) in Q2 2022.
Global headwinds place offices (continued low occupancy) and retail (pressure on consumers' wallets) assets under additional ...................... To view our full article Click here
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