Total global real estate assets under management have hit a new record high of €4.1 trillion in 2021, well above the 2020 figure of €3.3 trillion, according to the Fund Manager Survey 2022 published yesterday by ANREV, INREV and NCREIF.
The survey highlights the continued strong appetite for real estate as an instutional asset class, with AUM more than doubling in size since 2015. There was growth across the board with the average AUM for each manager reaching €28.6 billion, a sharp increase from €21.5 billion the previous year.
The survey shows there is a significant stockpile of dry powder amounting to more than €214 billion of undrawn, committed cash at the end of 2021, up from €195 billion in 2020. The largest managers collectively account for the majority (€153 billion) of these undrawn capital commitments.
The top 10 managers now account for €1.7 trillion, 41% of the total AUM. The top five global fund managers are Blackstone, Brookfield, Prologis, PGIM and Nuveen, all maintaining the same positions they had last year. Blackstone remains the only fund manager to feature in the top 10 rankings for global strategies and across all three main regions.
The following five in the rankings are MIM, CBRE Investment Management, AXA IM Alts, UBS and GLP, which was the only new entry in the top ten.
In Europe Blackstone is in first place, followed by Swiss Life, AXA IM Alts, Union Investment and abrdn. NN Investment Partners entered the European top 10 list for the first time in sixth position, followed by Credit Suisse Asset Management, Deka Immobilien Investment, Patrizia and UBS.
In 2021 North American strategies accounted for 38% of total global AUM, overtaking European strategies with 34%. Asia Pacific strategies were in third position (16%), followed closely by global strategies with 12%, which have seen an upsurge in interest. The growing allocation to global strategies suggests investors and managers wish to take advantage of economies of scale, and the market may have reached a certain level of saturation beyond which there’s a need to seek diversification through new opportunities.
Non-listed real estate vehicles – including funds, separate accounts, joint ventures, club deals, funds of funds and debt products – account for the largest proportion of AUM at 84.8% (€3.4 trillion). Other types of real estate – such as listed and derivatives – account for the remaining 15.2%.
Non-listed real estate funds continue to be the preferred product globally, with 49.5 % (€2.0 trillion) of the total non-listed real estate AUM. This is followed by separate accounts investing directly, then JVs and club deals, and debt funds.
“This is further robust evidence that real estate is a rapidly evolving and maturing asset class, in high demand”, said Iryna Pylypchuk, Director of Research and Market Information, INREV. “The large growth in fund manager AUM across the board reflects a continuous evolution of the global market and that real estate has its firm place in investor allocations, despite the legacy challenges of the Covid-19 pandemic, heightened geopolitical risk and current economic headwinds”.