Property vehicles stall in Q1 fund raising

Global fund raising for property funds has stalled to its slowest rate for eight years according to Preqin’s latest quarterly data. The firm’s Q1 2011 figures found that 17 funds raised $5.8bn at final closings, down from $6.5bn in Q4 2010 and far lower than the typical $30bn quarterly figures for 2006-08.

Preqin logged four European closings: €200m for Warburg-Henderson’s core pan-European KOOP fund, for four German pension funds; £125m for Melford Capital’s UK value-added Special Situations Fund; €317m for Sveafastigheter’s opportun-istic Fund III, targeting Nordics and Baltics assets; and €120m for DIC Asset’s German core-plus office fund.

US group Madison International Realty, which recently set up a London office, closed its fourth fund with $510m in Q1. It  has allocated some of the capital for the UK and Western Europe. The largest Q1 closing was Blackstone’s second special situations fund, with $1.5bn of equity to invest in US debt. The average time for funds to reach a final close is 17.3 months. Andrew Moylan, real estate data manager, said the successful capital raisers “can prove that they are experts in their strategy” and focus on a specific property type and/or region.

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