European non-listed real estate funds had trouble investing the equity they raised last year, according to the latest annual capital raising survey of Inrev, the association of non-listed real estate funds. In 2007, non-listed real estate funds drew on 69% of the capital raised that year compared with 90% in 2005. In 2006 the figure was 84%.
European non-listed real estate funds had trouble investing the equity they raised last year, according to the latest annual capital raising survey of Inrev, the association of non-listed real estate funds. In 2007, non-listed real estate funds drew on 69% of the capital raised that year compared with 90% in 2005. In 2006 the figure was 84%.
Opportunity funds were hit particularly badly, said Inrev research director Andrea Carpenter. Speaking at Inrev's fifth annual conference currently being held in Istanbul, she attributed the decline to the low availability of debt which has slowed down opportunity funds' investment plans.
Nevertheless, in absolute terms the amount of equity called in for 2003-2007 is at an all-time high, said Asli Ball, member of Inrev's research committee and vice president at GIC Real Estate. 'But that is against a background of a much higher amount of capital raised so there has actually been a decline in the ratio.'
Despite the onset of the credit crisis in the summer of last year, further capital raising targets remain high for 2008, with 68% of those planning to raise capital in 2008 expecting to exceed last year's performance. This optimism is partly due to the fact that European pension funds still want to raise their asset allocation to real estate, said Georg Allendorf, managing director at RREEF and memeber of Inrev's management board.
