Global capital raised for non-listed real estate investment is back to pre-crisis levels, according to INREV.
The European Association for Investors in Non-Listed Real Estate Vehicles found a 27.5% rise in capital raised last year.
More than half of the €122.7bn raised last year was committed to vehicles with a European strategy, INREV found, with 45% of total capital coming from pension funds.
The €28.1bn raised specifically for European non-listed real estate funds was 54.1% higher than in 2013 – almost matching the peak of €29.6bn achieved in 2007.
Nearly nine out of 10 (88.6%) fund managers that participated in INREV’s survey expected capital raising to continue over the next two years, further underlining investor confidence in the asset class but also raising questions about whether the market would reach a new peak.
Henri Vuong, INREV’s director of research and market information, said: “These figures point to investor confidence in the European real estate sector in general and a clear interest in non-listed real estate vehicles in particular.”
The majority of capital raised in 2014 was, Vuong said, for core strategies and funds with low leverage.
Only 5.2% of funds applied leverage of more than 60%, while opportunity funds attracted 13.7% of capital.
“Investors and fund managers are conscious of where we are in the cycle and that interest rates will rise,” Vuong said.
“There is an increased emphasis on long-term investing in this sector, with less focus on riding the cycle, which will ultimately stabilise the markets.”
Non-listed real estate funds and separate accounts made up 79.8% of total equity raised, while non-listed debt products continued to attract more capital, accounting for 11.9% of the total raised – up from 9% the previous year.
