While some of the most advanced economies in the developed world, particularly in the eurozone, continue to be affected by the uncertain financial climate, the BRIC region has attracted considerable interest from both real estate fund managers and institutional investors in recent years.
Preqin Investor Network currently tracks 57 real estate funds with some exposure to the BRIC region, representing 11.3% of real estate fund in market universe ($166bn). These BRIC-focused real estate vehicles are presently targeting an aggregate $26.5bn and seeking on average $500mn. In terms of fund manager location, 27 of these BRIC-focused real estate funds are managed by fund managers based in the same region, and a further 11 and 8 are being raised by fund managers headquartered in the US and Hong Kong respectively.
One of the largest real estate funds on the road focused on the BRIC is the China-focused CBRE China Opportunity Fund II. It is currently looking to raise $500mn and is expected to invest in mid-range residential development projects in first, second, and third-tier cities in mainland China. An opportunistic vehicle, Tishman Speyer Brazil Fund III, is also planning to target $500mn in order to develop mixed use, multi-family and office properties located in Brazil.