Global real estate assets under management up 20% to US$2.5 trillion in 2016

PETALING JAYA (May 25): The total value of global real estate assets under management (AUM) surged by 20% year-on-year from US$2.19 trillion (RM9.37 trillion) to US$2.5 trillion as at end-2016 with fund managers of all sizes increasing the value of their assets, according to the Fund Manager Survey 2017 conducted by the Asian Association For Investors In Non-Listed Real Estate Vehicles (ANREV), the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) and the National Council of Real Estate Investment Fiduciaries (NCREIF).

The average AUM among the top 50 global real estate managers increased by 25.8% to US$43 billion with Blackstone Group topping the overall rankings, followed by Brookfield Asset Management and PGIM Real Estate in third position. The top three firms managed real estate assets worth US$140.2 billion on average.

Within Asia Pacific, the top three fund managers were led by CapitaLand with US$42.4 billion in total real estate AUM followed by   Fosun Property Holdings  with US$32.4 billion and Mapletree Investments in with US$23.6 billion.

ANREV director of research and professional standards Amélie Delaunay said in a press release today that a key trend of the 2017 survey is that fund managers of all sizes grew their AUM over the past year demonstrating the attractiveness of real estate investment globally.

“The big managers also continue to get bigger, shown through the 25.8% uplift in the AUM of the top 50 from 2016,” he said.

By regional strategy, 17.1% of total global real estate assets were invested in Asia Pacific, compared with 34.4% in Europe, 36.8% in North America, 11.1% in global strategies, 0.6% in South America and 0.002% in Africa.

Non-listed real estate vehicles – including funds, separate accounts, joint ventures and club deals – accounted for US$2 trillion (80.4%) of all real estate AUM globally.

Delaunay pointed out that joint ventures and club deals are one of the most preferred routes to market, and account for a significant proportion of the value in Asia Pacific strategies at 28%, compared with 16% in North American and 10.1% in European strategies.

Meanwhile, one in five respondents in the global survey said they had been involved in merge and acquisition (M&A) activities over the past decade, reflecting the continuing trend for consolidation – particularly among larger managers.

Regarding the size of non-listed real estate funds, the regions varied notably. Across the globe, non-listed funds made up approximately half of the total value of non-listed real estate vehicles’ AUM. However, in North America and Asia Pacific, such vehicles accounted for only one-fifth (20% in Asia Pacific and 21.5% in North America) by number – a clear contrast to Europe where they accounted for 46.2% by number.

In terms of investor type globally for non-listed real estate vehicles, pension funds and insurance companies were the most significant sources of capital for non-listed funds and for separate accounts (direct). Together, these investors accounted for 63.7% of the AUM in non-listed funds and private REITs, and for 64% of the value in separate accounts (direct).