The total value of global real estate assets under management (AUM) reached €2.4 tln in 2016, up 20.1% on the €2 tln peak achieved the previous year, according to a report on fund managers published by INREV, ANREV AND NCREIF.
The associations' jointly produced Fund Manager Survey 2017 explores total real estate AUM of all real estate fund management companies, including details on regional composition and vehicle types.
This year, 177 fund managers took part globally, up from 154 in 2016. Of this year's participants, 90 were from Europe (50.8%), 52 from Asia Pacific (29.4%) and 35 from North America (19.8%).
‘This survey suggests that big is beautiful,' commented Henri Vuong, INREV’s director of research and market information. 'The size of the real estate pie is clearly continuing to grow with non-listed vehicles remaining a dominant part of that expansion. The survey also echoes investors’ stated appetite for greater allocations to real estate overall. It seems there’s plenty of dry powder waiting to be deployed.’
Biggest global fund managers still growing
The report revealed significant growth in the average AUM of the top 50 global real estate fund managers, with a 14.9% uplift from €35.6 bn in 2015 to €40.8 bn in 2016.
The top 10 global fund managers accounted for 38.8% of the overall total, while the average total AUM of the top three fund managers reached €133 bn versus €127.8 bn the previous year.
However, the average AUM of all respondents was up from €13.1 bn to €13.7 bn, indicating an increase in funds under management for all managers regardless of size.
US dominates rankings
Blackstone Group topped the overall rankings, followed by Brookfield Asset Management, and PGIM in third position, jumping six places from ninth the year before. Principle Real Estate Investors and Hines joined the top 10 global fund managers by total AUM, displacing LaSalle and Invesco.
Only two European managers – AXA Investment Managers - Real Estate and CBRE Global Investors – featured in the global top 10, but AXA dominated the list of European managers.
One in five survey respondents said they had been involved in M&A activity over the past decade, reflecting the continuing trend for consolidation, particularly among larger managers.
Non-listed real estate vehicles – including funds, separate accounts, joint ventures and club deals – accounted for €1.9 trn (80.4%) of total AUM. However, there were notable differences in regional investment strategies with non-listed real estate funds and private REITs accounting for 53.4%, 49.5% and 50.6% of total AUM in Europe, North America and Asia Pacific, respectively.
