ESR Leads APAC Real Estate Fund Managers by AUM: ANREV

Global real estate assets managed by a sample of fund managers reached $4.1 trillion at the end of 2023, representing a 2.5 percent decline from the prior year and marking the second consecutive year of contraction from the historic peak of $4.7 trillion achieved in 2021, according to the results of a survey published this past week.

The 2024 Fund Manager Survey published by the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV), which polled 96 global investment managers, attributed the decline to a smaller sample of responding managers, falling asset values, and reduced capital raising activity during the year.

The survey also revealed a greater concentration of assets held by the top 10 largest managers, with assets under management (AUM) of that cohort reaching $2.1 trillion last year, representing a 51 percent share of total surveyed AUM and an increase from 47 percent share in 2022.

“Despite a challenging year marked by declining values and reduced capital raising, the top 10 fund managers have significantly increased their market share, now holding over half of the total real estate AUM,” said Amelie Delaunay, ANREV’s senior director of research and professional standards. “This trend towards greater concentration among the largest managers underscores their resilience and ability to attract capital even in uncertain times.”

The annual poll is a collaboration between ANREV, its European counterpart INREV and US-based non-profit data provider National Council of Real Estate Investment Fiduciaries (NCREIF), which together serve the property investor community.

ESR Biggest in Asia Pacific

Average AUM across all 96 respondents stood at $42.4 billion, a 16.5 percent increase from the $36.4 billion average reported in 2022, while the top 10 managers in the survey managed an average $209.3 billion of real estate assets, representing a 7.2 percent increase from the previous year.

Among the top 10 managers globally, Blackstone, Brookfield Asset Management, and Prologis retained their first, second, and third positions, respectively. MetLife Investment Management and UBS Asset Management followed in fourth and fifth place, with UBS returning to the top 10 as the only new entrant in 2023, bolstered by its merger with Credit Suisse.

PGIM Real Estate, ESR, Nuveen, CBRE Investment Management, and AXA Investment Managers rounded out the top 10, with ESR being the sole Asia Pacific-based fund manager in the ranking.

All managers in the top 10 reported total real estate assets of over $100 billion, with Brookfield and Prologis registering AUM exceeding $200 billion and Blackstone topping the ranking with over $520 billion worth of property assets.

Among Asia Pacific-based managers, ESR, GLP, and CapitaLand Investment ranked as the top three largest in 2023, followed by Australia’s Charter Hall and Dexus in fourth and fifth place, respectively. Mapletree Investment, Korea’s IGIS Asset Management, Blackstone, Lendlease Investment Management, and Australian REIT GPT Group rounded out the top 10, with Dexus and GPT Group the sole new entries to the ranking in 2023.

North America Still Largest Allocation

The amount of dry powder among surveyed managers increased to $246 billion in 2023, representing 8 percent of total real estate AUM.

By geography, North America remained the largest allocation on average across the sample with $1.8 trillion worth of assets, accounting for 43 percent of total AUM. European strategies were the second biggest allocation with 26 percent of the total AUM, while Asia Pacific strategies represented around 19 percent of allocations with $766 billion in AUM. Global strategies rounded out the list with 12 percent of total assets.

By risk profile, core was the most preferred strategy among the surveyed managers, with 67 percent allocation globally and 52 percent in Asia Pacific, while opportunistic strategies represented 36 percent of the fund managers’ AUM in the region.

Non-listed real estate remained a significant portion of global assets, representing 82 percent of the total $4.1 trillion AUM, of which non-listed real estate funds constituted 60 percent, followed by direct investments through separate accounts, debt funds, and joint ventures or club deals.

Debt vehicles accounted for 13 percent of non-listed real estate allocations, reflecting growing momentum amid rising global interest rates. Debt AUM increased across all regions, totaling nearly $450 billion, representing a 14 percent increase from 2022.