Investors committed €29.1bn of fresh capital to unlisted real estate funds, clubs, joint ventures and other unlisted vehicles in Europe last year, according to INREV’s Capital Raising Survey 2013.
This is the first time INREV has collected data on capital raising across the full spectrum of non-listed real estate: funds, separate accounts, joint ventures, club deals, funds of funds and debt products.
The lion’s share, €11.5bn, went to funds, 24% up on last year and the biggest share since 2008. “These are encouraging data,” said Casper Hesp, INREV’s director of research and market information.
“They indicate that investors believe the market has reached its lowest point and are committing capital again.”
“There is also clearly an appetite for non-listed real estate funds which, to some degree, counters suggestions of a move away from funds towards alternatives such as club deals, joint ventures and real estate debt.”
However, investors are also shifting towards vehicles that give them more control. Nearly a third of the new capital raised, £9.5bn, went to separate accounts investing directly, while clubs and joint ventures garnered £4bn.
European debt funds were also popular, raising €3.6bn. These vehicles are growing at a faster rate than their current market share, INREV notes. The survey also indicates that investors are taking on more risk in the funds they back.
While core funds remain the most popular style, accounting for 63% of new equity last year, 28% went to opportunity funds and only 9% to value-added ones. In 2011 the style breakdown was 69%, 9% and 22% respectively.