Publications

- September 1, 2016: Vol. 10, Number 08

To read this full article you need to be subscribed to Institutional Real Estate Europe

Volatile times: Brexit puts pressure on boom-era property funds

by Jennifer Bollen

The United Kingdom’s vote in June to leave the European Union has further fuelled uncertainty surrounding pre-crisis real estate funds, which are already facing pressure to sell tens of billions of pounds/euros/dollars worth of assets.

Preqin has estimated that $9.32 billion (€8.4 billion) of assets remain within 2008-vintage Europe-focused real estate funds alone, with $10.65 billion (€9.58 billion) of unrealised value among 2007-vintage funds and $9.02 billion (€8.11 billion) in 2006-vintage vehicles. This compares with $3.15 billion (€2.83 billion) of unrealised value held by 2005-vintage funds and lesser amounts for 2004- and 2003-vintage funds. The “Unrealised value for Europe-focused real estate funds” table below gives further details.

The figures raise questions about whether managers should continue to hold their pre-crisis investments — executed in the era of dramatically rising deal values — in the hope of recovering value in the long term.

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?

We respect your privacy! Please give consent for processing data as described in our Privacy Policy