PERE’s seventh annual ranking of the largest institutional private real estate investors in the world has changed. Say hello to the Global Investor 50, which tracks equity committed to real estate through commingled funds, separate accounts, joint ventures, club vehicles and direct acquisitions. We decided to add 20 extra names to the list in recognition of the biggest trend in private real estate globally: that the sector is attracting record amounts of capital as it continues its inexorable march toward the mainstream of investing.
It seemed only fair, then, that we adjust our ranking accordingly to measure how this influx of capital is benefitting not just the industry’s marquee names, but also its lesser-known participants.
One thing that has not changed is the way in which we measure the industry’s largest players.
So, what has changed in the past 12 months? There have been shifts among the upper echelon of the ranking, with three of the top five trading places. However, no one has been able to unseat the Abu Dhabi Investment Authority, which once again retains top spot, having committed $46.95 billion to the asset class.
Stichting Pensioenfonds ABP, which invests in property via APG Asset Management, remains Europe’s heaviest-weight investor in second position. There are also no North America investors in the Global Investor 50 top five, with the highest ranked investor being seventh-placed TIAA Global Asset Management/Nuveen. That investor, however, jumped into the top 10 from last year’s 15th position after a strong showing following the restructuring of its US real estate operations under TH Real Estate.
In fact, compared with last year’s ranking, the North American investor contingent within the top 30 shrank from 18 to only 14. Stealing a march on these investors were the Europeans, which doubled their showing in the ranking from only six in 2016 to 10 within the top 30 this year. The rise of European investors has come at a time of considerable political uncertainty on the continent. The UK is still working toward Brexit, while Germany, France and the Netherlands all have had to contend with distracting national elections where anti-establishment sentiment and populism posed a threat to real estate and capital markets more broadly.
In spite of the movement within the ranking, the trend of the world’s largest pools of capital increasing their commitments to private real estate continues unabated. The top 30 last year committed $683 billion – versus $659 billion for the whole of 2015 – whereas that figure has jumped up to $719 billion in this year’s ranking. The entire 50 investors listed make that figure $896 billion. It will be interesting to compare these figures next year to find out if it is only the largest investors seeing the value of real estate, or whether some of the lesser-known institutions are also making a beeline for the asset class.