Despite challenges, fresh data released suggests that for the whole of 2021, the total raised for European non listed real estate vehicles reached €73bn.
The figure is a rise on 2020 levels when €51 bn was raised and is on a par with 2019 before the covid-19 crisis.
Suggestions that 2021 saw a recovery in European fundraising are contained within the Capital Raising Survey 2022 released by the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) in conjunction with ANREV plus NCREIF, representing Asia and North America respectively.
Inrev has released the survey findings this week to coincide with its annual conference currently being held in Athens.
Fundraising figures were also significantly up in North America and Asia. Taking all three regions together, fundraising was 107% up in 2021 compared to 2020.
Resi and logistics in demand
Within Europe, for the first time since 2017, the share of capital raising activity for funds that follow a multi country and multi sector strategy declined. However, they still raised more than half (51%) of the total new capital targeting European strategies in 2021. In turn, funds that followed a multi country and single sector strategy increased their 2021 share of capital raised to 18%, up from 13% in 2020.
Of those vehicles following European single sector strategies, residential and logistics sectors raised the most capital in 2021, with 12% and 11% respectively. Logistics saw the largest increase in capital raising activity - close to double the 6% reported in 2020, and significantly above its 10 year average of 7%.
Core strategies in demand
The majority of capital raised for European strategies was earmarked for vehicles with a low-risk strategy. Out of the €55.4 bn raised in total, 72% was destined for core equity or senior debt strategies. While out of the €43.7 bn raised for vehicles investing in equity, €30.8 bn targeted core strategies. Value added equity strategies attracted €8.6 bn of capital in 2021, while opportunistic equity strategies bagged a total of €4.3 bn.
Iryna Pylypchuk, Inrev director of research and market information, said: ‘The uptick in capital raising activity in 2021 reflects the pent-up demand accumulated during the most restrictive period of Covid-19 lockdowns and a surge in investor appetite for the asset class. These results indicate a positive outlook for the real estate investment industry, notwithstanding the challenges the investment managers have been facing in terms of capital deployment, with almost half of capital raised in 2021 yet to be invested.’
2022 prognosis
Data collection occurred before the war in Ukraine broke out. This has made it difficult to assess futuristic deployment intentions, according to Inrev.
‘Complex geopolitical, economic and inflationary outlook will put additional pressure on decision-making and deployment strategies in 2022,’ said Pylypchuk.
Were it were not that for that major doubt, the survey suggests that ‘the signs are that this upward trajectory will continue’. Some 76% of respondents expect an increase in capital raising activity over the next two years.
