Goldman Sachs raises US$3.5b for global real estate bets

GOLDMAN Sachs Group's asset-management arm raised US$3.5 billion for its latest fund dedicated to global real estate investments.

Known as West Street Real Estate Investment Partners, the vehicle raised capital from third-party investors alongside commitments from Goldman's balance sheets and employees, according to a client document seen by Bloomberg. Its goal is to make core-plus or value-add bets with a specific focus on resilient sectors that have favorable long-term growth trends, as well as positive long-term supply-demand dynamics. The fund has deployed more than 50 per cent of its capital so far, mostly on housing, logistics and office properties.

The vehicle is overseen by executives including Goldman's regional real estate heads, Gaurav Seth in the US, Jim Garman and Tavis Cannell in Europe, the Middle East and Africa, and Tak Murata in the Asia-Pacific. The fund has targeted gross annualized returns of 12 to 15 per cent, and an asset-level loan-to-value ratio of 65 per cent, the client document shows.

In recent months, New York-based Goldman has exited some of its wagers including a stake in a UK logistics portfolio and one in the Honeywell International headquarters building in Charlotte, North Carolina. Goldman Sachs Asset Management said it's invested in more than US$50 billion of real estate assets since 2012, including both debt and equity.

Global real estate funds gathered US$29.5 billion in the first quarter, a sizable drop from the record US$71.9 billion raised in the fourth quarter, according to data provider Preqin, which said it doesn't expect the hiatus to continue through this year. BLOOMBERG