Real estate assets under management hit US$2.19 trillion

GLOBAL real estate assets under management (AUM) totalled US$2.19 trillion last year, compared with US$2.17 trillion in 2014, according to the Fund Manager Survey 2016.

Funds with European strategies accounted for 34.9% (US$765.1 billion) of the total AUM, while those with North American strategies contributed to 32% (US$701.6 billion). Funds with Asia-Pacific strategies accounted for 17.7% (US$387 billion) of the total AUM.

In terms of value, funds with European strategies managed assets worth US$370.9 billion (38.7% of the total), while funds with North American strategies managed assets worth US$296.8 billion (31%). Funds with Asia-Pacific and global strategies managed assets worth US$141.1 billion (14.7%) and those with South American strategies managed US$8.5 billion (0.9%).

In Asia-Pacific, non-listed real estate funds accounted for 61% of the total non-listed real estate vehicles by value. Those in Europe and North America accounted for just above 50%.

Pension funds continued to make up the lion’s share of the capital in non-listed real estate vehicles, representing 48.6% of the institutional client base in 2015, up 5.8% from 42.8% in the previous year. Although insurance companies reduced their share slightly to 13.9%, it remained the second largest group of institutional investors. Sovereign wealth funds, meanwhile, increased their presence to 9.4% compared with only 6.7% in 2014.

Asian Association for Investors in Non-listed Real Estate Vehicles (ANREV) director of research and professional standards Amélie Delaunay says the non-listed real estate market was very active last year. “The top two managers — The Blackstone Group and Brookfield Asset Management — significantly increased their AUM, compared with three years ago. The survey also shows that investors continue to prefer non-listed funds and private REITs to access markets in each region.

“An interesting trend we are seeing is that Asia-Pacific fund managers are looking to launch funds in other regions to offer global exposure to investors. This, in turn, is contributing to a consolidation in the industry, which is likely to continue in the coming years.”

The top 10 largest fund managers collectively managed 41% of the total assets last year, up 4.5% from 36.5% in 2014. Brookfield led the list with US$149.8 billion under management, followed by Blackstone with US$147.6 billion.

In terms of Asia-Pacific strategies, Singapore-based CapitaLand was the largest fund manager with US$43.9 billion worth of real estate assets under management. China-based Fosun Property Holdings came in second place with US$34.2 billion under management while Mapletree Investments, also based in Singapore, was third with US$22.8 billion in AUM.

The Fund Manager Survey 2016 was conducted by ANREV, the European Association for Investors in Non-listed Real Estate Vehicles (INREV) and the National Council of Real Estate Investment Fiduciaries (NCREIF) in the US. A total of 154 fund managers from around the world participated in this year’s study.

This article first appeared in Personal Wealth, a pullout of The Edge Malaysia Weekly, on June 13, 2016. Subscribe here for your personal copy.