Real estate fundraising 'down by 19% in 2015', third highest year on record

Equity raising by real estate funds fell by 19% in 2015, according to preliminary figures compiled by Indirex, the online community for the industry.

Despite the sharp fall in fund raising, last year’s provisional total of $150 bn (€139 bn) was the third highest on record, behind the $185 bn raised in 2013 and 2014.

Indirex notes that market players are reporting a slowing in raising activity even though end-investors have consistently said in recent surveys that they intend to increase allocations to commercial real estate.

Indirex recorded just over $150 bn of equity raised from 1 January until the release of the findings on 23 December. The largest share (38%) was raised for North American focussed funds. A further 30% went into global funds, including the world's largest: Blackstone's BREP VIII. Europe focussed funds took 24% with Asia securing only 7%.

Indirex cited Blackstone BREP VIII as an example of the discrepancy between final close totals and the running totals given as raisings occur. The fund had raised $14.5 bn by the end of the first quarter of 2015, but all $15.8 bn was still included in its third-quarter figures.

The report also notes that property professionals from outside the fund industry might be surprised by the data as recent comment had suggested that 'Q3 was the highest raising quarter ever on record and that 2015 raisings were surpassing 2014'. Indirex explained that this was because these comments were based on figures that aggregated all cash raised by funds at final close rather than on raisings as they actually occurred.

Indirex concluded its report by posing the question: 'Are we entering a period when intentions and actions simply don't match up?'

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