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Fund managers parked more money in real estate in 2022: survey

Chong Xin Wei

Published Thu, May 18, 2023 · 05:01 PM
    • Among Asia-Pacific fund managers, ESR came out on top, propelled by its merger and acquisition growth.
    • Among Asia-Pacific fund managers, ESR came out on top, propelled by its merger and acquisition growth. PHOTO: ESR GROUP

    GLOBAL fund managers placed more money in real estate in 2022 than in the year before, a survey has found. The average real estate assets under management (AUM) of those who took part in the survey rose 8 per cent to US$35.1 billion.

    The poll, conducted by the Asian Association for Investors in Non-Listed Real Estate Vehicles (Anrev), the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) and the National Council of Real Estate Investment Fiduciaries (NCREIF), collated responses from 116 fund managers.

    Total global real estate AUM indicated by survey respondents stood at US$4.1 trillion in 2022 – lower than the US$4.7 trillion AUM tallied in the 2021 survey, but that poll had drawn responses from 147 managers.

    The survey found increasing concentration among the biggest managers, with the combined AUM of the top four managers accounting for almost 28 per cent of the total real estate capital.

    At the top of the heap, Blackstone raised its total AUM by over S$33 billion last year to cross the US$500 billion mark, outpacing the second-biggest manager Brookfield by over US$200 billion.

    The five biggest managers by AUM were Blackstone, Brookfield, Prologis, Nuveen and MetLife.

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    Hong Kong-based ESR vaulted into the global top 10 list, ranking sixth in 2022 with roughly US$130 billion in AUM.

    Total AUM of the top 10 managers exceeded US$1.9 trillion, with the average top 10 fund manager’s AUM at US$192.8 billion.

    Anrev said: “The upper quartile of survey respondents accounted for 81 per cent or US$3.3 trillion of total global AUM.”

    Among Asia-Pacific fund managers, ESR came top, propelled by its merger and acquisition growth. GLP Capital Partners and Goodman were ranked second and third respectively.

    Senior director of research and professional standards at Anrev Amelie Delaunay said it was interesting that non-listed real estate AUM in the Asia-Pacific was “dominated by single-sector industrial and logistics investment managers”.

    She said this represents a “shift from five years ago, when more diversified managers figured in the top three”.

    The bulk of global AUM are still headed for North American assets, accounting for 39 per cent of the total AUM at US$1.6 trillion.

    European strategies were the second biggest, and accounted for 30 per cent of the total allocations at US$1.2 trillion. Asia-Pacific strategies represented around 17 per cent, followed by global strategies, with a 14 per cent share.

    Non-listed real estate continues to represent a significant portion of the total global real estate AUM, with non-listed vehicles accounting for 82 per cent.

    Non-listed real estate funds remained the largest non-listed products by AUM globally, making up 60 per cent or US$2 trillion of the total non-listed real estate AUM.

    “The ongoing consolidation in the non-listed real estate industry is evident as the concentration of AUM in larger fund managers persists in 2022,” said Delaunay.

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