APAC Private Real Estate Fundraising Dipped 6% to $30B Last Year: Realfin

Fundraising for private real estate strategies targeting the Asia Pacific region suffered a 6 percent drop in 2022, but still vastly outperformed efforts in Europe and North America, according to data provider Realfin.

Last year saw 79 APAC real estate funds reach any stage of financial close, raising $30 billion in capital, London-based Realfin said in its State of the Market report released this week.

Asia for the first time beat Europe, which witnessed 75 funds reach any stage of financial close for a total volume of $25.8 billion, down 50 percent from the previous year. North America recorded 532 fund closings for a haul of $91.8 billion, down 26 percent.

“Our annual report shows that the global private real estate is alive but not quite well and, above all, unsure of itself as we enter 2023,” said Realfin CEO Riz Malik. “The defensiveness that set in in the second half of 2022 has weighed heavily but it is now uncertainty that is governing.”

Industrial Attracts Cash

The most popular sector among APAC funds last year was industrial (including logistics), which drew 48.9 percent of capital raised, followed by diversified (33.3 percent), residential (8.5 percent), office (7.7 percent), retail (2.2 percent) and hospitality (1.7 percent).

In terms of fund style, opportunistic strategies led the region with 42.3 percent of capital raised, followed by core (37.6 percent), debt (13 percent), value-add (5.5 percent) and core-plus (1.5 percent).

Realfin also compiled a ranking of Asia-based real estate fund managers by capital raised during the five years to the end of 2022, with Singapore’s GLP topping the table at $33.4 billion. Coming in a distant second was Hong Kong-listed ESR with $10.2 billion, followed by Beijing-based Sino-Ocean Capital ($7.4 billion), family-run Gaw Capital Partners ($6.2 billion) and Temasek-backed CapitaLand ($5.8 billion).

GLP ranked third among real estate fund managers worldwide for the five-year period, eclipsed by North American heavyweights Blackstone ($88.3 billion in capital raised) and Brookfield ($49.8 billion). ESR was the only other Asia-based shop to crack the top 20, placing 17th.

Global Downswing

The number of unlisted real estate funds reaching a final closing globally fell 34 percent year-on-year to 509 in 2022 as the amount of capital raised tumbled 26 percent to $182.3 billion, the report said. The number of new vehicles coming to market plunged 46 percent to 508, while aggregate capital sought fell by 54 percent to $209.2 billion.

In terms of target geographies, North America remained the champ with 49.7 percent of the fresh capital raised in 2022 destined for the continent, followed by multi-regional (19.7 percent), APAC (16.1 percent) and European (14.1 percent) strategies.

Looking forward, Realfin’s investor intentions survey shows that a higher proportion of investors (17 percent) say they will lower their allocation to unlisted real estate in 2023 than was the case in 2022 (11 percent).