Last year was a stellar period for the global property investment market. Transaction volumes for income-producing real estate reached a new record of $1.38 trillion with more properties traded than ever before, per MSCI Real Capital Analytics data.
The deal activity of the PERE 100 ranking of managers reflects this trend. They invested just less than $270 billion, which is 69 percent more than in 2020. Notably, the same group also ramped up their disposal activity, selling $181 billion of assets, as compared with $106 billion in 2020.
The capital raising and deployment activities at the top of the ranking ran in parallel. Blackstone and Brookfield, ranked one and two, epitomized this. Blackstone invested close to $50 billion last year, focusing its capital on the industrial and apartment sectors, accounting for 60 percent of all acquisitions.
Even though Brookfield invested less on offices than Blackstone in 2021, the sector was still its number one target, accounting for 30 percent of all investment activity. Brookfield also targeted the retail sector, deploying more than $2 billion, primarily on assets in China and the UK.
In this context, Brookfield is bucking the trend across many developed property markets, where buyers are shifting away from the two traditional commercial sectors of office and retail and toward industrial, apartments and niche sectors such as life sciences, student housing and data centers. Indeed, industrial property was the number one target for the PERE 100 in both 2020 and 2021.
US all-property transaction volume more than doubled in 2021 in comparison with 2020 and this increase in activity is reflected in the latest PERE 100 numbers too, where purchases doubled from $77 billion to $155 billion. The market also became more attractive in relative terms, accounting for 57 percent of all acquisitions, up from 48 percent in 2020. The UK was in second place, also recording a substantial increase in transaction volume in 2021 year-on-year. The country’s large and liquid industrial sector has become a major attraction for global capital sources.
In contrast to the Americas and EMEA, where transactions in 2021 eclipsed 2019 and 2020, acquisitions by the PERE 100 in Asia-Pacific were flat year-on-year and down by almost a third versus 2019.
Despite the slowdown in the East, US and Europe activity has been more than enough to elevate the overall transactional activity of the latest PERE 100 ranking into record territory.