Retail-Focused Private Real Estate Funds in Market – October 2013

by Jack Jackson

  • 25 Oct 2013
  • RE

There are currently 25 private real estate funds in market focused solely on the retail property sector, which are targeting $8.7bn in total aggregate commitments from investors. In the last 10 years, solely retail-focused real estate funds have raised over $40bn, with over $28bn raised since 2007, showing the sector continues to be an attractive investment opportunity for investors. As of October 2013, the largest solely retail-focused real estate fund in market is CBRE European Shopping Fund, a core-plus vehicle targeting €750mn in equity. The majority of the 10 largest retail-focused real estate funds in market utilize a core or core-plus strategy, including the second largest fund in market, Inland Retail Property Fund, which is a core vehicle targeting $1bn.

Fundraising for retail-focused real estate funds continues to be challenging in 2013, with only seven funds closed up to September, with $2.1bn capital committed. Despite this, it is likely that fundraising for the sector will match 2012 figures, which saw $2.9bn raised through 10 funds. This would hopefully be a sign that investors are returning to the real estate market, and that 2014 fundraising could reach the levels seen in 2011, when 14 solely retail-focused real estate funds closed with $4.7bn.

In terms of geographic preference, North America is the most favoured location for investment by retail-focused private real estate funds, with 12 funds in market targeting the region and looking to raise $4.3bn from investors. This is followed by Europe, with $3.3bn targeted by nine funds, and Asia, which has three funds in market targeting a total of $900mn. Finally, there is only one solely retail-focused real estate fund targeting markets outside of North America, Europe and Asia, which is looking to raise $200mn in capital commitments.

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