Investment managers raise over US$32bn for Asia Pacific real estate in 2019

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Real estate investment managers raised US$32.8bn for vehicles focused on Asia Pacific last year, up from US$26.9bn in 2018, according to a new survey.

A new survey, which was conducted by ANREV, INREV and NCREIF in January and February, found that investment managers raised a record US$225.8bn globally last year.

More than 60% of the new capital raised in 2019 was invested before the end of the year, leaving the outstanding amount still to be deployed amid the challenging conditions brought on by the COVID-19 pandemic.

The survey reported that nearly 70% of managers expected an increase in capital raising activities over the next two years.

“Last year’s record-breaking year reflected a wave of optimism that had been built over a number of years by the end of 2019,” said Amélie Delaunay, director of research and professional standards at ANREV.

“Up until the end of last year, more capital was being earmarked for Asia Pacific and managers based in the region were still looking increasingly outwards for their real estate investments. The COVID-19 crisis, however, has put the global economy on a drastically different course and will no doubt prompt strategic reappraisal and asset revaluation.

“With capital still left to be deployed, the question for real estate fund managers will be how best to put these funds to use at a time of unprecedented upheaval. The impact on the real estate industry is yet to be fully seen, but as an asset class, it remains an important component in long-term investors’ portfolio and source of diversification.”

While managers based in Asia Pacific allocated 79.6% of the equity they had raised to investments in their home region, local managers had also earmarked almost 14% of capital commitments to North American strategies.

European-based managers planned to invest 7% of capital raised into the APAC region, while North American managers had allocated 6.3% of new equity to Asia Pacific.