Retail-Focused Private Real Estate Fundraising

by Sarah Unsworth

  • 19 Aug 2011
  • RE

There are currently 25 retail-focused private equity real estate funds in market, targeting $8.1bn in equity. Of these funds, 11 have already held at least one interim close, raising an aggregate $2.6bn towards their targets.

14 of the retail-focused funds currently fundraising are targeting primarily European-based markets and are seeking an aggregate $5.7 billion in commitments. The largest of these funds is ING REIM European Shopping Centre Fund, managed by ING Real Estate Investment Management. The $1.8bn core-plus fund invests in shopping centres across Continental Europe. Eight solely-retail funds are US-focused and are seeking to raise a total of $1.3bn. The largest of these is the $500mn O'Connor Retail Partners. Elsewhere, there are three Asia and Rest of World-focused funds in market, seeking an aggregate $1bn. CFSGAM Property Enhanced Retail Fund, managed by Colonial First State Global Asset Management Property, is seeking to raise $534mn and focuses on the acquisition of sub-regional and neighbourhood shopping centre assets in Australia.

Between 2005 and July 2011, 80 solely retail-focused funds held final closes, raising $23.4bn in equity from investors. Primarily Asia and Rest of World-focused funds raised the most capital, with $10.1bn in commitments raised by 20 funds whereas 38 Europe-focused funds raised $9.5bn and 22 US-focused funds raised $4.7bn.

2007 was the best year for fundraising for solely-retail focused real estate funds, with 25 such vehicles holding final closes, raising an aggregate $9.3bn. The number of funds successfully holding final closes fell in 2007 however, with 13 funds closing on an aggregate $4.6bn. In the aftermath of the economic crisis, just six funds held final closes in 2009, raising a significantly lower $601mn from investors. Despite this, the fundraising environment had improved sufficiently in 2010 for nine funds to raise $1.8 billion. In 2011 to date, three retail-focused funds have held final closes, raising a combined total of $1.4bn, with $1bn of this capital being raised by Macquarie Infrastructure and Real Assets’ China-focused retail fund.

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