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Private Real Estate Fundraising For Investments outside North America, Europe and Asia

by Charles Wood

  • 07 Sep 2015
  • RE

Preqin defines ‘Rest of World’ (ROW) as regions that fall outside North America, Europe and Asia. Despite representing approximately a fifth of the world’s total population, funds focused on these regions represent only 9% of private real estate funds in market.  Preqin’s Real Estate Online service currently tracks 40 funds in market focused on real estate investments outside the traditional markets, collectively targeting $9.4bn in institutional capital commitments

As can be seen in the chart above, the peak year in terms of number of funds and aggregate capital raised was 2012, when 25 funds held a final close for a total of $7.3bn. In the following two and a half years, only $6.6bn was raised for funds focused outside North America, Europe and Asia. Given that there is less than half the year remaining in 2015, the year’s fundraising total is unlikely to exceed the $2.8bn raised in 2014. 

Since 2011, ROW-focused private real estate has been driven by investment in Australasia and Latin America, specifically funds focused on investments in Australia and Brazil. Twenty-nine solely Australia-focused funds have closed since 2011, raising $5.1bn, while 24 solely Brazil-focused funds have closed having raised $8.7bn. Over the same period, six Middle East-focused funds raised $597mn and four Africa-focused private real estate funds have closed after collecting $570mn. 

Eighty-two percent of the ROW-focused funds in market are attempting to raise $400mn, with over half of these targeting less than $200mn in capital commitments. Comparatively, of the funds in market focused on the more traditional markets of North America, Europe and Asia, 39% are targeting less than $200mn, while 30% are targeting over $400mn. Only two ROW-focused private real estate funds are targeting over $600mn and both target real estate in Brazil. Managed by US-based GTIS Partners, GTIS Brazil Real Estate Fund III is targeting $650mn to acquire troubled development projects or provide liquidity to distressed companies in Brazil. The largest fund in market focused on real estate outside North America, Europe and Asia is Patria Brazil Real Estate Fund III, which is targeting $800mn to acquire, develop, redevelop and reposition a diversified range of assets in Brazil.

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