It is fair to say each of the organizations, individuals, fundraises and deals that won awards did so despite the challenges placed in front of the private real estate industry by the covid-19 pandemic. The pandemic was an accelerant of trends already in train and this led to some stark outcomes in the awards, with once-alternative sectors prevailing among the supporting reasons for many wins. Conversely, former staple sectors were conspicuous in their absence within the activities of participants.
From the information contained in the many awards pitches we gratefully received, to the way you, our readers, voted, our editorial team gained plenty of insight into the industry’s response to covid-19. Here are five of these insights:
Domination of (once) niche sectors: Covid-19 accelerated once-alternative assets into the mainstream for private real estate investors. Nowhere was this better exemplified than in the life sciences sector, which provided the biggest transaction of 2020. Blackstone’s $14.6 billion recapitalization of BioMed Realty Trust won several awards in the Global as well as North America categories. That was part of a 6.6 percent increase in investment in the sector seen by property services firm JLL between November 2019 and November 2020. In Europe as well, the Deal of the Year went to another one-time niche sector and another Blackstone deal. It was a student housing transaction – Blackstone’s $6 billion acquisition of the iQ student accommodation platform.
Big logistics bets: Logistics went into the pandemic already a hot favorite sector for investors across the world. But within the sector, there was movement in terms of headline activity. For instance, Asia-Pacific stood out for its high number of entity-level industrial transactions. ARA Asset Management won the Deal of the Year award for its purchase of logistics specialist LOGOS Property Group in addition to the Singapore-based firm’s co-founder John Lim winning the Industry Figure of the Year award. Large logistics fundraises in Japan and China from another Singapore-based manager, GLP, helped that firm bag two regional awards, while Warburg Pincus’s backing of ARA and Chinese logistics firm New Ease saw it win Firm of the Year for China. Such activity mirrors the data: Asia-Pacific saw $31 billion in industrial acquisitions completed in 2020, marking a 16 percent year-on-year increase, according to Real Capital Analytics.
Lackluster retail and hotel transactions: Conversely, two of real estate’s previously mainstream sectors have seen decreased activity since the coronavirus outbreak. Travel restrictions and economic shutdowns challenged the underwriting of retail and hotel assets. This was reflected in fewer award submissions for these categories across regions, and the highlighted transactions were also of a comparatively smaller scale than those in other sectors. That should not be surprising. Real Capital Analytics reported global hotel transaction volumes fell 65 percent to $28.1 billion in 2020, while retail deals fell 32 percent year-on-year to $88.9 billion.
Focus on occupiers: There will be a profound change in occupier needs across sectors, especially offices, in a post-covid world. Hines’ $1.5 billion joint venture partnership with Korea’s National Pension Service was structured to accommodate these needs, with the ability to develop assets across property types globally via a single discretionary, long-term mandate. A second notable mandate from Canada’s Ivanhoe Cambridge, which sees Hines manage 10 US skyscrapers to ensure they meet tenant needs post-crisis, further underpinned the Houston-based manager’s three award wins and saw boss Jeffrey Hines awarded with the Lifetime Achievement Award.
Fundraising giants: Despite 2020 being an overall challenging year for fundraising, with most firms forced to switch to virtual roadshows to attract investor commitments, serial fundraisers and mega-managers still closed multi-billion-dollar funds. Blackstone won several awards for its record-breaking capital raises: the $11.91 billion Blackstone Real Estate Partners Europe VI and the $8 billion Blackstone Real Estate Debt Strategies IV. Meanwhile in Asia, Gaw Capital Partners closed its largest vehicle to date – the $2.2 billion Gateway Real Estate Fund VI – and took home the Capital Raise of the Year award.
Check out the complete list of award winners here.