Retail-Focused Private Real Estate Funds in Market – February 2014

by Charles James

  • 14 Feb 2014
  • RE

There are currently 18 real estate funds in market that have a primary focus on retail properties, with an aggregate target capital of $5.3bn. In the last 10 years, $41.3bn of capital has been raised by 153 funds focusing on retail properties, of which $30.8bn has been raised since 2007. Ten primarily retail-focused funds closed in 2013, a slight decrease from 2012 when 11 funds closed. Despite this, aggregate capital raised over this period actually increased from $3bn in 2012 to $3.1bn in 2013.  

With a target of just over €750mn, the core-plus-focused CBRE European Shopping Centre Fund is the largest primarily retail-focused fund currently in market and it has held four closes since it launched in 2010. Value added is the most popular strategy type among primarily retail-focused funds currently in market, with 10 of the 18 utilizing this strategy, while five have an opportunistic focus. This appetite for risk is in contrast to that of October 2013, when, the dominant strategy types among the funds in market were core and core-plus strategies. As of February 2014, only two of the primarily retail-focused funds in market are of these strategies. 

In terms of geographic preference, North America is overwhelmingly the most prevalent focus of primarily retail-focused funds in market. Eleven funds target this region while only three are targeting Europe and Asia, and one focuses on Africa. Europe and Asia-focused funds in market that have a primary focus on retail properties, however, have a much larger average target size, $628mn and $350mn, respectively, compared to $197mn for North America.

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