Home / News / Press Releases / €123 (US$150.7) billion capital raised for global non-listed real estate investment in 2020

€123 (US$150.7) billion capital raised for global non-listed real estate investment in 2020

Substantial volume of capital targets Europe and non-listed real estate remains attractive  

22 April 2021, Amsterdam – Despite the outbreak of the COVID-19 pandemic, global real estate investment managers raised at least €123 billion (US$150.7 billion) of new capital for non-listed real estate in 2020, according to the Capital Raising Survey 2021, published today by ANREV, INREV and NCREIF. 

However, total capital raised in 2020 fell relative to the record high of €196 billion (US$220.3 billion) attained in 2019, largely as a consequence of the pandemic. Nearly a third of managers said they hadn’t raised any new capital in 2020, with many citing a lack of available product as the main reason. The number of vehicles raising capital also dropped year-on-year from a record 982 in 2019 to 699 in 2020.

Despite this slowdown, on average the capital raised by individual vehicles was higher than in 2019 except for those with a North American regional strategy.  The average capital raised for each vehicle with a global strategy was €0.8 billion (US$ 1 billion) versus €0.5 billion (US$0.6 billion) in 2019.  Similarly, investment activity remained robust with 52%% of capital raised in 2020 already deployed. Furthermore, more than two thirds (76%) of investment managers expect an increase in capital raising activity over the next two years.

The report found that a significant proportion of the new capital raised – 41% – was allocated to vehicles targeting Europe, while 24% was destined for vehicles aimed at North America, and 17% assigned to Asia Pacific vehicles. The remaining 17% was targeting global strategies and tended to raise a notably larger amount of capital per vehicle than the 2021 average.

Of the total capital raised, a record 60% (€74 billion/US$90.7 billion) was destined for non-listed real estate funds, emphasising the continuing strong appetite for these vehicles among institutional investors around the world.

Managers based in Asia Pacific and Europe showed the strongest domestic bias, allocating 87% and 86% of the equity raised to their home territory, respectively. Investors in North America once again demonstrated the most robust preference for cross-border reach, with 32% of new capital raised targeting global strategies, 43% earmarked for their home region, and the remainder split between Europe (19%) and Asia Pacific (6%).

European market eyes non-listed funds and debt products

A total of €51 billion was raised for European strategies in 2020, with non-listed funds again featuring prominently, attracting 39% of all new capital raised in the region. Separate accounts were the second most important target vehicle, securing 23% of the new equity. 

However, non-listed debt products accounted for the largest increase in capital raised for European strategies, jumping from 4.6% in 2019 to 19% in 2020, with a strong preference for senior debt. This continued interest in debt products from institutional investors complements the report’s findings of a strong focus on core strategies – be it debt or equity non-listed real estate. Together, these data echo general investor preferences for lower risk strategies expressed in the 2021 Investment Intentions Survey.  

For the first time since 2015, insurance companies became the most important source of capital for vehicles with a European strategy, accounting for 37% of the total capital raised in the European region.

Investors opt for older vintages

Over half (56%) of the new capital raised for European strategies was allocated to funds with vintages preceding 2011. While newly launched funds – with a 2020 vintage – represented only 4% of the new capital raised. 

Interestingly, funds launched in 2019, accounted for 14% of the total capital raised in 2020. This marks the first time, since the series began in 2011, that funds raised more capital in their second year than during their first year. This is likely due to several factors, including a lack of suitable products for investment.

Residential secures the top spot for sector allocations in Europe

Last year, the largest proportion of capital raised for single-sector strategies was targeted towards residential/multi-family apartments (38%). This was followed closely by industrial/logistics (33%), and then offices (16%). As expected, it was another difficult year for funds offering retail strategies, which accounted for just 8% of new capital raised in 2020.

The focus on residential/multi-family apartments goes hand in hand with the strong investor demand for the sector off the back of its stable income driven performance in markets such as Germany and the Netherlands, where it has been an entrenched part of the market for a long time.  This is complemented by the growth of institutional investor interest in the sector in those European markets where residential has been less of an established institutional asset class until recently. 

Growing preference for European multi-sector and multi-country strategies 

The share of new capital raised for European funds following a multi-country and multi-sector strategy increased from 41% in 2014, to 62% last year. While this comes at the expense of single-country multi-sector funds, they are still the second choice for investors with a share of 14%. Single-country single-sector funds and multi-country single-sector funds accounted for 12% and 11% of total capital raised, respectively.

This move towards multi-sector and multi-country strategies reflects investors’ growing appetite for diversified strategies through large stable income producing assets, with low leverage.  Increasingly, it’s an approach that appeals to, and is achievable for, smaller investors as well as their larger counterparts.   

Lonneke Löwik, INREV CEO, commented: ‘The fall in the level of capital raised in 2020 compared with the record-breaking achievement of 2019, obviously reflects the impacts of Covid-19.  Not all capital has been invested and there is less investible product available.  However, this research also highlights a clear sign of continuing strong investor appetite for non-listed real estate, a positive outlook on future capital raising activity among investment managers, and a general expectation that new products will emerge.’

– Ends –

For further information, please contact: 
Johlyn da Prato, johlyn.da.prato@inrev.org  | +31(0) 621397456
Justin St Clair-Charles, inrevteam@firstlightpr.com | +44 (0) 7769 644 059
Josie Workman, inrevteam@firstlightpr.com | +44 (0) 7460 325 392

Notes to Editors

About the Capital Raising Survey 2021
The Capital Raising Survey 2021 records details of capital raising activity in the non-listed real estate industry during 2020. It provides insights subdivided by region, vehicle type and investment strategy. The 2021 release includes data from 127 investment managers. Of these, 61 are domiciled in Europe, 32 in Asia Pacific and 34 in North America.

Launched in 2006, the Capital Raising Survey has been carried out on a global basis since 2015 with data collected jointly by ANREV, INREV and NCREIF. All figures in the report are quoted as at end 2020, unless otherwise stated.

INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, was launched in May 2003 as a forum for investors and other participants in the growing non-listed real estate vehicles sector. The association represents and reflects an industry with a total value of €2.8 trillion and INREV members deliver €385 billion of stimulus to the real economy of Europe. 

INREV has 453 members which include 91 of the largest institutional investors as well as 40 of the 50 largest real estate fund managers, plus banks and advisors across Europe and elsewhere. 

The non-profit association is focused on increasing the transparency and accessibility of non-listed vehicles, promoting professionalism and best practice, and sharing knowledge. It is based in Amsterdam, the Netherlands. 

Based in Chicago, the National Council of Real Estate Investment Fiduciaries (NCREIF) is the American association of institutional real estate professionals who share a common interest in their industry. This includes investment managers, plan sponsors, academicians, consultants, appraisers, CPA's and other service providers who have a significant involvement in institutional real estate investments. They come together to address vital industry issues and to promote research. NCREIF acts as a non-partisan collector, processor, validator and disseminator of real estate performance information, including several quarterly indices. https://www.ncreif.org 

About ANREV 
ANREV is the Asian Association for Investors in Non-Listed Real Estate Vehicles, a not-for-profit organisation based in Hong Kong. ANREV's agenda is driven by the members, in particular the investors, and is focused on improving transparency and accessibility of market information, promoting professionalism and best practices, sharing, and spreading knowledge. Fund managers, investment banks, lawyers and other advisors provide support in addressing key issues facing the Asian non-listed private equity real estate fund markets. 

ANREV is part of a global alliance together with the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) and the National Council of Real Estate Investment Fiduciaries (NCREIF), which works with the other regional associations to advance the global agenda of transparency, accessibility and professionalism and increased harmonisation across the non-listed real estate industry. http://www.anrev.org