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Research - MAY 29, 2018

Global real estate AUM increased 11.8% to $2.8t in 2017

by Andrea Zander

Total global real estate assets under management (AUM) rose from $2.5 trillion at the end of 2016 to $2.8 trillion by the end of 2017, with fund managers of all sizes increasing the value of their assets, according to the Fund Manager Survey 2018 conducted by ANREV, INREV and NCREIF.

The average AUM among all managers increased by 22.2 percent in 2017 from $14.4 billion to $17.6 billion. The top five managers posted real estate assets under management of more than $100 billion each.

The Blackstone Group once again topped the overall rankings with $193.8 billion in real estate–related AUM, followed by Brookfield Asset Management in second place with $155.5 billion and PGIM in third position with $127.9 billion.

CapitaLand Limited again dominated the list of Asia Pacific managers, topping the list for the second consecutive year with its AUM totaling $61.3 billion, followed by Mapletree Investments with $32.3 billion and ARA Asset Management with $26.4 billion. Overall, the AUM of the top three managers in Asia Pacific increased by nearly 35 percent during 2017.

By regional strategy, 16.9 percent of total global real estate assets were invested in Asia Pacific, compared with 33.8 percent in Europe, 36.9 percent in North America, 11.9 percent in global strategies, 0.6 percent in South America and 0.05 percent in Africa, a very similar geographic split to last year.

Non-listed real estate vehicles — including funds, separate accounts, joint ventures and club deals — accounted for $2.4 trillion (83.3 percent) of all real estate AUM globally. In Asia Pacific, the majority of assets continued to be invested in non-listed funds and private REITs, with 59 percent invested in these vehicles. This was followed by separate accounts (direct), which made up 17.4 percent of the region’s total AUM. This trend was broadly mirrored in other regions, with non-listed real estate funds and private REITs accounting for 55.1 percent of European AUM and 47.6 percent in North America.

Non-listed real estate funds by themselves represented 45.5 percent of total global AUM. Per region, they represented 39.6 percent of total Asia Pacific AUM, 40.2 percent of total North America AUM, 51.3 percent of total Europe AUM and 51 percent of global strategies.

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). In Asia Pacific, pension funds accounted for 51.3 percent of the AUM in non-listed direct real estate vehicles, while it accounted for 43 percent in Europe and 47.3 percent in North America. Insurance companies represented 31.2 percent of the AUM of non-listed direct real estate vehicles in Europe, against only 6.0 percent and 6.8 percent in Asia Pacific and North America, respectively.

Sovereign wealth funds’ share was significantly higher in Asia Pacific, where they represented 15.6 percent of AUM compared with other regions, 4.4 percent in Europe and 10.2 percent in North America.

The survey still points to a consolidation trend in the industry, with almost a quarter of respondents in the global survey saying they had been involved in M&A transactions over the past decade.

“Real estate assets under management continue to increase for all fund managers, reflecting the attractiveness of real estate as an asset class for investors,” said Amélie Delaunay, director of research and professional standards at ANREV. “The big managers also continue to get bigger, with $100 billion in AUM now needed to make it into the top five.”

 

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