Canada-Focused Private Real Estate Fundraising – July 2013

by Farhaz Miah

  • 19 Jul 2013
  • RE

Canada-focused private real estate fundraising has been relatively mixed in recent years, declining from 2007 when five funds raised an aggregate CAD 1.2bn to just one fund closing on CAD 100mn in 2009. However fundraising bounced back strongly in 2010, when four funds raised an aggregate CAD 1.2bn, equalling the amount of capital raised in 2007. This was followed by two successive years of weaker fundraising; three funds raised CAD 400mn in 2011 followed by a further three funds closing CAD 500mn in 2012.

Of the Canada-focused funds that have closed between 2002 - June 2013 and those that are in market, a sizeable 46% are diversified in terms of the types of properties targeted. A significant 29% focus on residential properties with industrial properties preferred by 13% of funds. Niche property types are sought out by 8% of Canada-focused funds. Solely focusing on office and retail property types is not a particularly favoured strategy by Canada-focused funds, with only 4% and 2% of vehicles focused solely on these sectors respectively.

Currently, six Canada-focused private real estate funds are seeking to raise an aggregate CAD 1.3bn. The largest of these, Northam Canadian Commercial Property Fund II, managed by Northam Realty Advisors is a core and core-plus vehicle, seeking CAD 500mn to invest primarily in office properties across the major metropolitan cities of Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal. The fund may also consider investing in logistics and retail properties within these cities.

KingSett Real Estate Growth III, managed by KingSett Capital, is the largest Canada-focused closed-end private real estate vehicle to have closed between 2007 – June 2013. The opportunistic fund, which raised CAD 700mn, targets a diverse range of property sectors throughout Canada. The follow on fund, KingSett Real Estate Growth IV, which employs a similar strategy to its predecessor vehicle, is the second largest vehicle to have closed between 2007 - June 2013, securing CAD 450mn in equity commitments.

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