Private real estate fundraising during H1 2018 showed noticeable shifts in terms of the geographies and sectors where investors are putting their capital, according to newly released PERE data.
The amount of capital raised during the first half of 2018 held steady at $60.56 billion, just slightly above the $60.23 billion amassed during H1 2017. Last year marked the lowest private real estate fundraising volume in the past six years, with an aggregate $114.49 billion collected, down from the 2015 peak of $152.52 billion, the data showed.
When broken down by geography, multi-region funds comprised the largest percentage of overall fundraising volume at 32.39 percent during H1 2018. North America was the single-largest region in terms of percentage of total capital raised at 28.39 percent, but its share of capital raising volume fell considerably from 49.29 percent in 2017. Additionally, the region’s fundraising percentage was at its lowest level in the past six years.
Europe claimed the second-largest percentage as a single region, with 19.53 percent, but that was also down from 28.26 percent the previous year. Asia came just behind Europe, with 19.42 percent of total capital raised, but it was the only region that increased its percentage of total fundraising from the previous year. The 19.42 percent, in fact, was the largest fundraising percentage for the region over the six-year period.
Meanwhile, sector-specific fundraising hit its lowest levels in six years, accounting for just 16 percent of total capital raised, marking a steady decline since 2012, when such funds represented 31 percent of overall fundraising volume. Sector-agnostic fundraising, meanwhile, has steadily increased during that time period, rising from 69 percent in 2012 to 84 percent during H1 2018.
Indeed, eight of the top 10 largest property funds that closed during the first six months of the year, including Starwood Capital Group’s Starwood Opportunity Fund XI Global and Blackstone’s Blackstone Real Estate Asia Partners II, were sector-agnostic. The two sector-specific funds in the top 10 were Berkshire Property Advisors’ Berkshire Multifamily Debt Fund II and GLP’s GLP China Value-Add Venture I. Multifamily and industrial, moreover, were the sectors that attracted the largest amounts of capital during H1 2018, netting $3.98 billion and $2.88 billion, respectively of a total $9.43 billion.