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Share of Asia-Pacific real estate AUM up in 2018; CapitaLand top in region with US$55.9b in AUM: poll

ASIA-PACIFIC (APAC) recorded US$586.2 billion in total real estate assets under management (AUM) in 2018, representing 18.4 per cent of US$3.2 trillion in total global real estate AUM, up from 16.9 per cent in 2017.

CapitaLand Limited led 2018 APAC rankings with US$55.9 billion in AUM, while logistics group GLP was second with US$36.3 billion, and Mapletree in third spot with US$28.3 billion, in a fund manager survey by three real estate industry associations.

Non-listed real estate – funds, separate accounts, joint ventures, club deals, funds of funds and debt products – made up 73.6 per cent of APAC AUM, although this was less than the 87.7 per cent for Europe and 75.2 per cent for North America.

Globally, non-listed real estate represented 84 per cent - or US$2.7 trillion - of the US$3.2 trillion total AUM.

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Within APAC non-listed real estate, non-listed funds make up more than half of non-listed real estate vehicles AUM at 57.2 per cent, in line with 57.8 per cent for Europe and 51.1 per cent for North America.

The source of capital for APAC non-listed direct real estate vehicles  mostly originated from the region's investors, 75.1 per cent, in line with the general bias of regional strategies being funded by domestic capital. North American investors made up 14.2 per cent and European investors made up 10.2 per cent.

According to the survey, APAC showed a greater level of diversity in its investor base than Europe, where 80.2 per cent of AUM is sourced from within the region. On the other hand, North America sourced only 61.4 per cent of its AUM domestically.

In terms of APAC investor composition, pension funds represented over half (50.2 per cent) of non-listed direct real estate AUM (direct asset buying). Pension funds accounted for 43.8 per cent for Europe and 42.1 per cent for North America.

Sovereign wealth funds are the next largest source of capital for real estate in APAC, making up 15.7 per cent of AUM, followed by insurance companies with 11.2 per cent.

Globally, Blackstone Group made history by breaching the US$200 billion mark for the first time, reporting US$230.6 billion in real estate AUM, a 19 per cent increase from US$193.8 billion in 2017, and topping the overall ranking of total real estate AUM globally.

The firm was followed by Brookfield Asset Management, with total real estate AUM of US$187.3 billion, a surge of 20.5 per cent from the previous year. In third position was PGIM with US$168.9 billion in real estate AUM.

The general uptick in AUM volumes and significant growth of some individual managers reflected continuing consolidation in the real estate industry. Almost a fifth of managers reported involvement in mergers or acquisitions (M&A) over the past 10 years, with 30 per cent of them citing the expansion of global footprint as the main motivation for M&A activity.

The survey was jointly conducted by the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV), European Association for Investors in Non-Listed Real Estate Vehicles (INREV) and National Council of Real Estate Investment Fiduciaries (NCREIF).

“This year’s survey shows strong trends for assets under management intended for real estate. The surge in total real estate assets under management generally and among specific managers is further evidence of real estate’s important diversification role, with the increase in Asia-Pacific’s share of total real estate AUM a reflection of this trend,” said Amélie Delaunay, ANREV director of research and professional standards.

“It is clear from the findings that non-listed real estate funds are the vehicle of choice for investors looking to gain exposure to this important asset class.”