Private real estate investors hailing from outside of North America have assumed a greater share of the equity invested in the asset class, according to key findings from this year’s Global Investor 50 ranking.
The ranking, which measures the world’s biggest institutional investors’ equity exposures to the asset class, has grown 10.6 percent to a value aggregate of $991 billion from $896 billion in 2017. Within this bigger exposure, investment from European, Asian and Middle Eastern investors accounted for 60.5 percent, up from 58.5 percent last year, with US and Canadian investors’ share reducing to 39.5 percent from 41.5 percent.
In absolute value terms, European investors’ representation in the ranking increased 12.8 percent to $360 billion, even while the number of European institutions represented slipped by two. Taking up two spaces were Asian investors, whose representation increased by 29 percent to $122.8 billion. The Middle East contingent, effectively three sovereign wealth funds, increased 8 percent to $122.8 billion.
The proportionately greater European showing is the latest indication of how the region’s investors have stepped up their investing activities. While organizations such as Norway’s sovereign wealth fund manager, Norges Bank Investment Management, have been on an investing charge from a standing start after the global financial crisis, other longer-standing investors have accelerated their international programs, most notably Allianz Real Estate.
The real estate investment division of the German insurance giant was particularly acquisitive in 2018, adding approximately $8 billion more equity in the asset class. Consequently, the investor sits second in this year’s ranking, with $48.2 billion committed, up from fourth position last year and behind only the Abu Dhabi Investment Authority, which has a standalone $62 billion committed.
Allianz was not the only European investor to rise in 2018. AXA Investment Managers, the real estate business of French financial giant AXA, rose a place to fourth on $41.4 billion, while Swiss Life, Norges Bank, Italian investor Assicurazioni Generali, Germany’s BVK and The Netherlands’ PPGM also saw their positions elevate. Notably, within the top 30 positions of the ranking, European investors have proliferated from six in 2016, to 10 last year and 11 this year.
Conversely, the North American contingent in the top 30 dropped from 18 in 2016 to 14 last year and 12 this year, all the while maintaining 24 entries in the overall 50. The North American investment aggregate grew 4.8 percent to $390.7 billion, while its proportional representation dipped to below the 40 percent mark.
Tellingly, while the regional proportions have shifted, the top 50 investors as an aggregate are more invested in the asset class – despite indications of lower investment. According to Real Capital Analytics, the Global Investor 50 had acquired $36.8 billion of direct private real estate in the year to the time of publication and were net buyers to the tune of $5.7 billion. They had bought $65 billion and sold $22 billion last year.
To view the full ranking and our methodology, click here.
For all GI 50 2018 coverage, including a downloadable PDF and profiles of the institutions in our ranking, click here.