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ANREV: Asia-Pacific capital raising is back on track

Amélie Delaunay, ANREV’s director of research and professional standards, reviews a turbulent year.

Last year saw unprecedented turmoil for the investment community. With an international ban on travel, real estate investment, traditionally a very “local” activity, had to move online.

Amélie Delaunay

Despite the outbreak of covid-19, global real estate investment managers raised at least $150.7 billion of new capital for non-listed real estate in 2020, compared with the record high of $220.3 billion raised in 2019, according to the ANREV/INREV/NCREIF Capital Raising Survey 2021.

After a record $32.6 billion raised for Asia-Pacific in 2019, the amount in 2020 decreased to $26.2 billion, although that was in line with capital raised in the years immediately before the pandemic, with $26.2 billion in 2017 and $26.9 billion in 2018. This is a positive indicator that real estate has retained its attractiveness despite the pandemic.

Institutional investors have confirmed their interest in the asset class, according to the ANREV/INREV/PREA Investment Intentions Survey 2021. Despite the turbulence of 2020, 77 percent of respondents said that the pandemic had not changed their investment plans in Asia-Pacific.

Across all investment destinations globally, more investors reported plans to increase allocations to real estate than to reduce them because of covid, which was particularly the case with Asia-Pacific investments as 22 percent said the crisis urged them to increase their planned investments in the region.

Real estate allocations on average make up 9.3 percent of institutional investors’ portfolios and are set to increase up to 10 percent over the next two years. Notably, 72 percent of institutional investors expect to increase their allocations to Asia-Pacific, more than in any other region.

New world record

Global real estate assets under management increased to a record $4.1 trillion at the end of 2020, up 11 percent over the previous year. In Asia-Pacific, total real estate AUM amounted to $726.9 billion, up from $608.2 billion a year prior, representing a significant jump of 20 percent.

Non-listed real estate and non-listed real estate funds represent a significant portion of total global real estate AUM, highlighting the importance of getting more transparency on the performance of those vehicles. Following the development of specific indices such as the Australia core open-end fund monthly index or the ANREV ODCE to cover the performance of pan-Asia core open-end diversified funds, ANREV members have been pushing for more indices.

In 2020, we launched an asset-level performance report for ODCE funds as well as a global IRR index in collaboration with INREV and NCREIF. In 2021, we are developing new initiatives to give the industry access to relevant indices to track the performance of non-listed funds and vehicles in Asia-Pacific.