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PREQIN QUARTERLY UPDATE:
REAL ESTATE
Q3 2017Insight on the quarter from the leading provider of alternative assets data
alternative assets. intelligent data.
Content includes:
FundraisingFunds in MarketDeals Institutional Investors Dry Powder Fund Performance
© Preqin Ltd. 2017 / www.preqin.com2
PREQIN QUARTERLY UPDATE: REAL ESTATE, Q3 2017
FOREWORD - Oliver Senchal, Preqin
Over the past few quarters, real estate fundraising has struggled to remain consistent, and 2017 is on course to see one of the lowest totals in the past fi ve years. The number of funds closed in Q3 was a little more than half that seen in Q2, and aggregate capital
raised in the quarter is following a similar trend of decline. Europe-focused fundraising has suff ered especially this quarter, with the number of funds closed plummeting, and the aggregate capital secured also declining.
Although fewer funds are closing now than in previous years, the average fund size is growing – in fact, at $618mn, Q3 2017 has the second highest average fund size ever recorded. The average net asset values of properties held in closed-end funds have risen for the 27th consecutive quarter, which is helping fund managers to justify larger fund sizes. Though, this will do little to dispel the concerns around higher asset pricing, which have been echoed by both fund managers and institutional investors.
Strong performance, however, continues to contribute to the high level of investor satisfaction with the asset class. If fundraising is to pick up in Q4 – typically the period of most activity in the year for real estate fund managers – fi rms will need to demonstrate their ability to source attractive investment opportunities, at a time when many are starting to question whether we have reached the top of the market. Doing so will be a challenge, with a record number of vehicles for investors to choose from in the market today.
We hope that you fi nd this report useful and welcome any feedback you have. For more information, please visit www.preqin.com or contact info@preqin.com.
REAL ESTATE ONLINE
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All rights reserved. The entire contents of Preqin Quarterly Update: Real Estate, Q3 2017 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Quarterly Update: Real Estate, Q3 2017 is for information purposes only and does not constitute and should not be construed as a solicitation or other off er, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent fi nancial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Quarterly Update: Real Estate, Q3 2017. While reasonable eff orts have been made to obtain information from sources that are believed to be accurate, and to confi rm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Quarterly Update: Real Estate, Q3 2017 are accurate, reliable, up-to-date or complete. Although every reasonable eff ort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Quarterly Update: Real Estate, Q3 2017 or for any expense or other loss alleged to have arisen in any way with a reader’s use of this publication.
p3 Fundraising
p5 Funds in Market
p6 Deals
p9 Institutional Investors
p10 Dry Powder
p11 Fund Performance
3
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FUNDRAISING
Private real estate fundraising declined in Q3, with 38 funds reaching a fi nal close, securing an aggregate $20bn, a 41%
decrease in capital raised from the previous quarter (Fig. 1). Quarterly fundraising in Q3 2017 is at its lowest level since Q1 2013 ($10bn), and the number of funds closed at its lowest quarterly level in over seven years.
As in the previous quarter, opportunistic funds raised the largest share of aggregate capital in Q3, despite fewer fund closures than value added (13) and debt funds (8, Fig. 2). This was largely driven by the $4bn close of Carlyle Realty Partners VIII in July 2017, an opportunistic vehicle that targets offi ce, residential, senior living, hotel and retail properties across the US market.
1 0.1
135.9
7 6.6
20.3
85.0
20.95 1.5
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80%
90%
100%
No. of FundsClosed
Aggregate CapitalRaised ($bn)
Core
Core-Plus
Debt
Distressed
Opportunistic
Value Added
Fund of Funds
Source: Preqin Real Estate Online
Prop
ortio
n of
Tota
l
Fig. 2: Closed-End Private Real Estate Fundraising in Q3 2017 by Primary Strategy
23 13.2
10 4.6
5 2.6
0%
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100%
No. of FundsClosed
Aggregate CapitalRaised ($bn)
Rest of World
Asia
Europe
North America
Source: Preqin Real Estate Online
Prop
ortio
n of
Tota
l
Fig. 3: Closed-End Private Real Estate Fundraising in Q3 2017 by Primary Geographic Focus
7280
63
117
51
9381
96
69 7361
128
66
99
63
106
8573
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8774 69
38
17 18 15
35
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29 2941
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2439 43
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0
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Q3
2012 2013 2014 2015 2016 2017
No. of Funds Closed Aggregate Capital Raised ($bn)
Source: Preqin Real Estate Online
Date of Final Close
Fig. 1: Closed-End Private Real Estate Fundraising, Q1 2012 - Q3 2017
$20bnin aggregate capital was raised
by closed-end private real estate funds closed in Q3 2017.
65%of aggregate capital raised by funds closed this quarter was
secured by North America-focused funds.
61%of capital raised in Q3 2017 was accounted for by value added
and opportunistic funds.
$4bnwas raised by Carlyle Realty
Partners VIII, the largest fund closed in the quarter.
KEY FACTS
© Preqin Ltd. 2017 / www.preqin.com4
PREQIN QUARTERLY UPDATE: REAL ESTATE, Q3 2017
Fig. 6: 10 Largest Private Real Estate Funds Closed in Q3 2017
Fund FirmFund Size
(mn)Strategy Geographic Focus
Carlyle Realty Partners VIII Carlyle Group 4,000 USD Opportunistic US
Secured Capital Real Estate Partners VI PAG Real Estate 1,900 USD Debt, Distressed, Opportunistic Asia
CRE Senior 10 AXA Investment Managers – Real Assets 1,500 EUR Debt Europe, North America
H/2 Special Opportunities IV H/2 Capital Partners 1,587 USD Debt North America, West Europe
DivcoWest Fund V DivcoWest 1,585 USD Value Added North America
Oak Street Real Estate Capital Fund IV Oak Street Real Estate Capital 1,250 USD Core-Plus, Value Added US
Cabot Industrial Value Fund V Cabot Properties 775 USD Value Added UK, US
Stabilis Fund V Stabilis Capital Management 525 USD Debt US
Capman Nordic Real Estate Fund II CapMan Real Estate 425 EUR Value Added Nordics
ICG-Longbow UK CRE Senior Debt Programme Vintage III ICG-Longbow 370 GBP Debt Europe
Source: Preqin Real Estate Online
18
1618 18 18 18
0
2
4
6
8
10
12
14
16
18
20
2012 2013 2014 2015 2016 2017YTD
Source: Preqin Real Estate Online
Aver
age
Tim
e Sp
ent i
n M
arke
t (M
onth
s)
Fig. 4: Average Time Spent in Market by Closed-End Private Real Estate Funds, 2012 - 2017 YTD
Year of Final Close
13% 11% 9% 6% 9% 7%
36% 34% 36% 39% 34% 40%
14%14% 17% 23%
17% 13%
26%23% 23%
23%27% 27%
11%18% 16%
9% 14% 13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017YTD
125% or More
101-124%
100%
50-99%
Less than 50%
Source: Preqin Real Estate Online
Prop
ortio
n of
Fun
dsFig. 5: Closed-End Private Real Estate Funds by Proportion of Target Size Achieved, 2012 - 2017 YTD
Year of Final Close
The decline in fundraising in Q3 compared to the previous quarter is largely due to lower levels of higher-risk fundraising. The number of opportunistic and value added funds reaching a fi nal close declined from 48 in Q2 2017 to 20 in Q3, and aggregate capital raised fell from $24bn to $13bn respectively. Core and core-plus funds have had a relatively successful quarter for fundraising, with seven funds reaching a fi nal close for an aggregate $2.4bn, compared to eight funds securing $850mn in Q2 2017.
While the decline in North America-focused fundraising was slight, for Europe-focused fundraising it was drastic: the number of funds reaching a fi nal close fell from 19 in Q2 2017 to 10 in Q3, with the
aggregate capital raised declining from $16bn to $4.6bn. Notably, Asia-focused fundraising improved in Q3 2017, with fi ve funds focused on the region securing an aggregate $2.6bn. In Q2 2017, only three Asia-focused funds held a fi nal close, raising a combined $40mn.
The amount of time spent in market by real estate funds has remained stable since 2014, at an average of 18 months (Fig. 4). Fundraising in 2017 is proving tougher than in 2016, with only 53% of funds closed in the year so far achieving or exceeding their target size (Fig. 5). However, the proportion of funds that reached a fi nal close in 2017 so far that achieved less than 50% of their target is lower than in 2016. In Q3, fundraising has been relatively successful for those reaching a fi nal close: 78% of funds closed have met or exceeded their target, with a signifi cant 30% securing 125% or more of their target size.
The amount of capital raised fell 41% between Q2 and Q3 2017
5
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FUNDS IN MARKET
At the start of Q4 2017, there are a record 569 private real estate funds in market, collectively seeking $185bn in investor capital
(Fig. 7). This represents a 2% increase in the number of funds raising capital, and a 5% ($8.3bn) rise in targeted capital from the previous quarter.
North America-focused vehicles continue to dominate the fundraising landscape: the majority (57%) of capital targeted is earmarked for investment in the region (Fig. 8). Such funds are seeking $106bn in institutional commitments, which is more than twice the total capital targeted by Europe-focused vehicles.
With increasing numbers of funds in market, competition for investor capital remains intense; nearly two-thirds (65%) of vehicles have been seeking capital for more than a year (Fig. 9).
Value added vehicles make up the largest proportion of both funds in market and aggregate capital targeted: 200 funds seek $58bn, including two of the fi ve largest vehicles on the road, Starwood Global Opportunity Fund XI and Brookfi eld Strategic Real Estate Partners III (Fig. 10).
Fig. 10: Five Largest Closed-End Private Real Estate Funds in Market
Fund FirmTarget Size
(mn)Strategy Geographic Focus
Starwood Global Opportunity Fund XI Starwood Capital Group 6,000 USD Debt, Distressed, Opportunistic, Value Added North America, Europe
Blackstone Real Estate Partners Asia II Blackstone Group 5,000 USD Opportunistic Asia, Australasia
Brookfi eld Strategic Real Estate Partners III Brookfi eld Property Group 4,000 USD Opportunistic, Value Added Global
PIMCO Bravo Fund III PIMCO 3,500 USD Debt, Distressed, Opportunistic North America, Europe
Brookfi eld Real Estate Finance Fund V Brookfi eld Property Group 3,000 USD Debt North America
Source: Preqin Real Estate Online
0
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2013 2014 2015 2016 2017
No. of Funds Raising Aggregate Capital Targeted ($bn)
Source: Preqin Real Estate Online
Fig. 7: Closed-End Private Real Estate Funds in Market over Time, Q1 2013 - Q4 2017
15%25%
7%
21%
24%
19%
17%
17%
16%
17%
12%
20%
31%22%
38%
0%
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80%
90%
100%
All Funds Funds Yetto Hold an
Interim Close
Funds that HaveHeld at Least One
Interim Close
More than24 Months
19-24 Months
13-18 Months
7-12 Months
6 Monthsor Less
Source: Preqin Real Estate Online
Prop
ortio
n of
Fun
ds
Fig. 9: Time Spent on the Road by Closed-End Private Real Estate Funds in Market
328 106
129 44
70 24
42 10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No. of FundsRaising
Aggregate CapitalTargeted ($bn)
Rest of World
Asia
Europe
North America
Source: Preqin Real Estate Online
Prop
ortio
n of
Tota
l
Fig. 8: Closed-End Private Real Estate Funds in Market by Primary Geographic Focus
© Preqin Ltd. 2017 / www.preqin.com6
PREQIN QUARTERLY UPDATE: REAL ESTATE, Q3 2017
DEALS
The number of private equity real estate (PERE) deals completed continues to recover from the low seen in Q1 of
this year, with a total of 1,170 deals completed in Q3 (Fig. 11). However, deal value is 18% ($12bn) less than in Q2 2017, with $56bn worth of transactions completed in Q3. The rise in activity can mostly be attributed to the completion of smaller deals, with the proportion of completed deals valued at less than $50mn having increased by four percentage points over the quarter (Fig. 12).
Offi ce assets remain the most common property type, both in terms of the number of deals and value (Fig. 13). Residential acquisitions amounted to almost $16bn (28%) during Q3 2017, nearly double its share of aggregate value in the previous two quarters. However, over a quarter (27%) of residential deal value
0%
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Q1
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Q3
2014 2015 2016 2017
$1bn or More
$500-999mn
$250-499mn
$100-249mn
$50-99mn
Less than$50mn
Source: Preqin Real Estate Online
Prop
ortio
n of
Dea
ls
Fig. 12: Private Equity Real Estate Deals by Value, Q1 2014 - Q3 2017
815
1,028943
1,093991
1,236
1,0861,241
1,2541,216
1,1481,240
987
1,147 1,170
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2014 2015 2016 2017
No. of Deals Aggregate Deal Value ($bn)
Source: Preqin Real Estate Online
No.
of D
eals
Fig. 11: Private Equity Real Estate Deals, Q1 2014 - Q3 2017
Aggregate Deal Value ($bn)
5% 6% 3%10%
13% 13%10%
6%3% 6%
1%6%
7%5%
7%7%
5% 4%6%
2%
25%28% 38% 32%
3%28%
25% 16% 28%
15% 12% 16%9%
0%
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Q3 2016 Q3 2017 Q3 2016 Q3 2017
No. of Deals Aggregate Deal Value
Retail
Residential
OperatingCompanyOffice
Niche
Mixed-Use
Land
Industrial
Hotel
Source: Preqin Real Estate Online
Fig. 13: Private Equity Real Estate Deals by Primary Asset Type, Q3 2016 vs. Q3 2017
Prop
ortio
n of
Tota
l
$56bnAggregate value of the 1,170
PERE deals completed in Q3 2017.
73%of capital was invested in
single-asset PERE deals in Q3, a 14-percentage-point increase
on Q2 2017.
28%The proportion of capital
allocated to residential PERE deals compared to 16% in
Q3 2016.
$3.8bn Aggregate value of the fi ve
largest single-asset PERE deals completed in Q3 2017.
KEY FACTS
7
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16% 14%
36%27%
84% 86%
64%73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q3 2016 Q3 2017 Q3 2016 Q3 2017
No. of Deals Aggregate Deal Value
Single Asset
Portfolio
Source: Preqin Real Estate Online
Fig. 15: Private Equity Real Estate Deals by Transaction Type, Q3 2016 vs. Q3 2017
Prop
ortio
n of
Tota
l
Fig. 17: Five Largest Portfolio Private Equity Real Estate Deals Completed in Q3 2017
Asset Asset Type Buyer(s) Seller(s)Deal Size
(mn)Location(s)
Deal
Date
Monogram Residential Trust Residential Greystar Real Estate Partners Monogram Residential Trust 3,000 USD US Jul-17
US, Diversifi ed Portfolio Offi ce Stonemont Financial Group Oak Street Real Estate Capital 1,300 USD US Sep-17
US, Residential Portfolio Residential Starlight Investments, Unidentifi ed Buyer(s) Unidentifi ed Seller(s) 1,300 USD US Jul-17
QHotel Portfolio Hotel Aprirose Real Estate Investment Bain Capital Credit, Canyon Partners Real Estate 525 GBP UK Sep-17
UK, Hotel Portfolio Hotel Henderson Park Capital Tonstate Group 500 GBP UK Aug-17
Source: Preqin Real Estate Online
33% 35%
10% 14%
20% 23%
10%15%
28%28%
25%
38%
18% 15%
56%
33%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q3 2016 Q3 2017 Q3 2016 Q3 2017
No. of Deals Aggregate Deal Value
500,000ft² or More
200,000-499,999ft²
100,000-199,999ft²
Less than 100,000ft²
Source: Preqin Real Estate Online
Fig. 14: Private Equity Real Estate Deals by Asset Size,Q3 2016 vs. Q3 2017
Prop
ortio
n of
Tota
l
Fig. 16: Five Largest Single-Asset Private Equity Real Estate Deals Completed in Q3 2017
Asset Asset Type Buyer(s) Seller(s)Deal Size
(mn)Location
Deal
Date
Starrett City Residential Rockpoint Group, Unidentifi ed Buyer(s) Unidentifi ed Seller(s) 850 USD US Sep-17
Worldwide Plaza Mixed Use RXR Realty, SL Green Realty New York REIT 843 USD US Sep-17
Anting Town Development Site Land Vanke Unidentifi ed Seller(s) 745 USD China Sep-17
Wynyard Place Land AMP Capital Investors, UniSuper Brookfi eld Property Group 900 AUD Australia Sep-17
550 Washington Street Offi ce Oxford Properties Atlas Capital Group, Westbrook
Partners 700 USD US Sep-17
Source: Preqin Real Estate Online
is attributed to just two deals: Greystar Real Estate Partners’ acquisition of Monogram Residential Trust, and Starlight Investments' acquisition of a US residential portfolio (Fig. 17).
Unsurprisingly given the increase in lower-value transactions, there has been a two-percentage-point increase from this time last year in the proportion of PERE deals where the asset is smaller than 100,000ft2 (Fig. 14). These smaller deals are also representing an increasing proportion of total deal value, up from 10% in Q3 2016 to 14% in Q3 2017.
The make-up of the number of deals by transaction type in Q3 2017 has remained relatively similar to Q3 2016 (Fig. 15). However, there has been a signifi cant 11-percentage-point drop in the proportion of aggregate deal value accounted for by portfolio deals.
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INSTITUTIONAL INVESTORS
Investor appetite for higher-risk strategies has cooled further in Q3 2017, with the proportion of investors targeting opportunistic
and value added real estate funds decreasing by six and fi ve percentage points respectively (Fig. 18). Real estate debt funds have grown in prominence over the year, with appetite from the institutional investor community increasing signifi cantly: 18% of investors sought these funds in Q3 2016 compared to 27% in Q3 2017. This may be an indication that investors are looking to diversify their real estate portfolios and move away from those strategies that have experienced high valuations in recent times.
Investors’ geographic preferences have not shifted as signifi cantly, as seen in Fig. 19. However, the proportion of investors targeting
North America-focused funds has decreased by eight percentage points from Q3 2016.
According to Preqin’s interviews with investors in June 2017, 26% of investors plan to allocate more capital to real estate in the next 12 months compared to the previous 12 months. Correspondingly, the proportion of investors looking to allocate $600mn or more has increased from 5% in Q3 2016 to 13% in Q3 2017 (Fig. 20).
There has been a decrease in the proportion of investors planning smaller commitments of less than $100mn, from 53% in Q3 2016 to 46%, and nearly two-thirds (64%) of investors expect to invest in one to three funds in the next 12 months (Fig. 21).
47%
53%
25%
4%8%
33%39%
52%
27%
4%7%
34%
0%
10%
20%
30%
40%
50%
60%
Nor
thA
mer
ica
Euro
pe
Asi
a-Pa
cific
Rest
of W
orld
Emer
ging
Mar
kets
Glo
bal
Q3 2016
Q3 2017
Source: Preqin Real Estate Online
Prop
ortio
n of
Fun
d Se
arch
es
Region Targeted
Fig. 19: Regions Targeted by Private Real Estate Investors in the Next 12 Months, Q3 2016 vs. Q3 2017
61%
27%
18%
8%
49% 50%55%
34%27%
10%
43% 45%
0%
10%
20%
30%
40%
50%
60%
70%
Core
Core
-Plu
s
Deb
t
Dis
tres
sed
Opp
ortu
nist
ic
Valu
e A
dded
Q3 2016
Q3 2017
Source: Preqin Real Estate Online
Prop
ortio
n of
Fun
d Se
arch
es
Fig. 18: Strategies Targeted by Private Real Estate Investors in the Next 12 Months, Q3 2016 vs. Q3 2017
Strategy Targeted
35% 33%
18%13%
27%
24%
16%
17%
5%13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q3 2016 Q3 2017
$600mn or More
$300-599mn
$100-299mn
$50-99mn
Less than $50mn
Source: Preqin Real Estate Online
Prop
ortio
n of
Fun
d Se
arch
es
Fig. 20: Amount of Capital Investors Plan to Commit to Private Real Estate Funds in the Next 12 Months, Q3 2016 vs. Q3 2017
23%
41%
29%
7%
1 Fund
2-3 Funds
4-9 Funds
10 Funds orMore
Source: Preqin Real Estate Online
Fig. 21: Number of Private Real Estate Funds Investors Plan to Commit to in the Next 12 Months
© Preqin Ltd. 2017 / www.preqin.com10
PREQIN QUARTERLY UPDATE: REAL ESTATE, Q3 2017
DRY POWDER
Private real estate dry powder levels stand at $244bn as at September 2017 (Fig. 22); this is a modest decline of $9bn
since July, suggesting that fund managers have succeeded in putting capital to work over the past quarter. July was the pinnacle in terms of the level of dry powder, reaching $253bn (Fig. 23).
North America-focused funds account for the largest proportion (60%) of global dry powder, standing at $147bn in September 2017 (Fig. 24). The availability of capital for North American assets may also contribute to pushing valuations higher. Dry powder levels have increased slightly across all other regions since the end of 2016, although there has been a $4bn decrease in the amount
of Europe-focused capital available to deploy since June 2017.Opportunistic and value added funds continue to account for the largest amounts of industry dry powder, representing 41% and 24% respectively. Debt funds, which have rapidly risen in prominence in recent months, experienced a $4bn increase in dry powder from June to September 2017, and are the fastest growing strategy this year in terms of dry powder (Fig. 25). Dry powder has decreased for both core/core-plus and distressed funds, suggesting that more capital has been deployed through these strategies since the end of 2016.
147
59
28
90
20
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140
160
Dec
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Sep-
17
North America Europe Asia Rest of World
Source: Preqin Real Estate Online
Dry
Pow
der (
$bn)
Fig. 24: Closed-End Private Real Estate Dry Powder by Fund Primary Geographic Focus, 2007 - 2017
165 168 176
150161
136
202 195
229 223244
0
50
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Dec
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Dec
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Sep-
17
Source: Preqin Real Estate Online
Dry
Pow
der (
$bn)
Fig. 22: Closed-End Private Real Estate Dry Powder, 2007 - 2017
27
46
12
99
59
0
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17
Core/Core-Plus Debt Distressed Opportunistic Value Added
Source: Preqin Real Estate Online
Dry
Pow
der (
$bn)
Fig. 25: Closed-End Private Real Estate Dry Powder by Strategy, 2007 - 2017
249251 250
247 247
244
253
241
244
220
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240
250
260
Jan-
17
Feb-
17
Mar
-17
Apr
-17
May
-17
Jun-
17
Jul-1
7
Aug
-17
Sep-
17Source: Preqin Real Estate Online
Dry
Pow
der (
$bn)
Fig. 23: Monthly Closed-End Private Real Estate Dry Powder, January 2017 - September 2017
11
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FUND PERFORMANCE
Closed-end private real estate has continued to deliver strong returns in recent quarters, with an average NAV increase of
2.4% at the start Q4 2016 – the most recent quarter for which data is available – marking 27 consecutive quarters of growth (Fig. 26). The PrEQIn Real Estate Index stands at 112.5 as of December 2016 (rebased to 100 as at December 2007), with all strategies increasing between Q3 and Q4 2016 (Fig. 27). The Real Estate Debt Index has grown the most in the quarter, increasing 8.7% to reach 146.8 points by the close of 2016.
Closed-end private real estate funds with recent vintages continue to deliver strong returns: 2014 vintage funds have a median net IRR of 12.1%, while the top-quartile boundary of the same vintage
is 18.4% (Fig. 28). These recent vintage funds may soon deliver higher net IRR performance as they realize assets in their portfolio and then benefi t from current high valuations (Fig. 28). Beyond this, there is still signifi cant unrealized value in older funds, which have the potential to bolster already high distributions to investors.
Core/core-plus funds delivered more consistent returns than the more volatile IRRs seen across other strategies. Value added funds of recent vintages have strong returns: 2014 vintage funds have delivered a median net IRR of 12.7%, outperforming all other strategies (Fig. 29).
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Top Quartile NetIRR Boundary
Median Net IRR
Bottom QuartileNet IRR Boundary
Source: Preqin Real Estate Online
Net
IRR
sinc
e In
cept
ion
Vintage Year
Fig. 28: Closed-End Private Real Estate Funds: Median Net IRRs and Quartile Boundaries by Vintage Year
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Core/Core-Plus
Debt
Opportunistic
Value Added
Source: Preqin Real Estate Online
Net
IRR
sinc
e In
cept
ion
Vintage Year
Fig. 29: Closed-End Private Real Estate Funds: Median Net IRRs by Strategy and Vintage Year
109.7
135.1
96.590.9
0
20
40
60
80
100
120
140
160
Dec
-07
Jun-
08D
ec-0
8Ju
n-09
Dec
-09
Jun-
10D
ec-1
0Ju
n-11
Dec
-11
Jun-
12D
ec-1
2Ju
n-13
Dec
-13
Jun-
14D
ec-1
4Ju
n-15
Dec
-15
Jun-
16D
ec-1
6
PrEQIn Real Estate PrEQIn Real Estate DebtPrEQIn Opportunistic PrEQIn Value Added
Source: Preqin Real Estate Online
Inde
x Re
turn
(Reb
ased
to 1
00 a
s of
31-
Dec
-200
7)
Fig. 27: PrEQIn Index: Real Estate by Strategy, (Rebased to 100 as of 31 December 2007)
-0.4%
0.2%
4.0%
7.3%
4.5%
5.6%
1.5%
2.5%2.6%
2.3%1.9%
2.6%2.6%
1.7%
3.4%3.9%
1.3%
4.5%
1.9%
4.4%
2.4%2.3%
2.3%
3.8%2.8%
2.5%2.4%
2.4%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2010 2011 2012 2013 2014 2015 2016
Source: Preqin Real Estate Online
Aver
age
Chan
ge in
NAV
from
Pr
evio
us Q
uart
er
Fig. 26: Closed-End Private Real Estate Quarterly Change in NAV, Q1 2010 - Q4 2016
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