Despite their extensive investment platforms and teams around the world, the PERE 100 was not immune to the difficulties of investing during 2020. According to Real Capital Analytics’ records of transaction activity, this group of leading investors placed $144 billion into global real estate in 2020, down 34 percent on 2019 levels.
The PERE 100 net added the largest volume of commercial properties to their books than any year since the global financial crisis. This cohort sold $102 billion for a post-GFC net investment record of $42 billion. This would indicate that the same restrictions that prevented investments also prevented dispositions.This decline was steeper than the overall global activity levels recorded by Real Capital Analytics, which fell 17 percent over the same period. That indicates the difficulties of moving capital and investing cross-border with the pandemic restrictions in place. RCA’s wider analysis indicates that investment by domestically focused groups held up better than their cross-border peers.
As they do on the fundraising side, unsurprisingly, the top 10 managers of the PERE 100 account for 55 percent of all investment by the top 100, with Blackstone alone accounting for 18 percent.
US-headquartered investors accounted for three-quarters of activity. According to our data, France drove into the second spot in the list of top country sources for the PERE 100, pushing Canada into third position.
One half of all activity was recorded in the US. The UK received the second largest share of capital invested, at 10 percent, with Germany placing third. This cohort of managers were active in 41 countries – buyers were in 33, and sellers in 35.
It is clear there has been a significant change in investment strategy for this cohort, matching wider industry trends.
In 2015, they invested 31 percent of their capital into apartment and industrial assets and 35 percent into offices. In 2020, offices made up 29 percent, with apartments and industrial assets comprising 59 percent. The hotel and retail sectors fell to 2 percent and 4 percent, respectively. With the future of the office being debated, ‘beds and sheds’ have clearly found favor with this group.
The movements of the PERE 100 have been stark but predictable.