Deals

CBRE Global Investors has $6bn in dry powder for 2015

The Los Angeles-based real estate investment management giant said it has 47 percent more equity to deploy going into 2015 than it had at the start of last year.

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CBRE Global Investors (CBRE GI), the real estate investment management giant, has started the year with $6 billion of dry powder for investments around the world, PERE can reveal.

The Los Angeles-based firm, which managed $90.6 billion of assets at the turn of the year, said its available equity represented a 47 percent increase on the amount of available equity it had at the start of 2014.

Speaking exclusively to PERE, CBRE GI’s chief executive officer, Matt Khourie, said: “We’re coming into this year with much more dry powder than we’ve had in previous years. I’d say we’ve had above-market success in capital raising which will allow us to buy more this year than we’ll sell.”

The majority of the $6 billion has been raised via separate accounts and approximately 20 percent of it has come from Asia, a region Khourie predicted would expatriate even more capital in the years ahead. 

Khourie said the majority of the capital available was raised for strategies that are focused on the US and on Europe, and that there was a diversified mix of risk profiles within them.

CBRE GI acquired $9.2 billion of property in 2014. It sold $8.1 billion meaning that 53 percent of its transactional activity represented purchases and 47 percent represented dispositions. 

In terms of regions, CBRE GI transacted the most in Europe, with $10 billion of deals. European markets where notable levels of activity happened included the UK, the Netherlands and Spain. Further, more than 50 percent of the firm’s European deals were in the retail sector.

In the US, meanwhile, the firm transacted $5.6 billion of deals, while in Asia it transacted $1.7 billion of deals.

And although Khourie described the 2014 market environment, on a global basis, as “mid-cycle”, he expected the firm to buy even more real estate in 2015. “I would expect that in 2015 we will be even bigger net buyers, than we were this past year,” he said.

Khourie said that US and UK property markets were “further along” in their respective property cycles, but that the big picture was balanced out by certain markets “ coming out of the trough.”