Retail-Focused Real Estate Fundraising – November 2012

by Luke Alexander

  • 23 Nov 2012
  • RE

Preqin’s Real Estate Online database shows there are currently 29 solely retail-focused real estate funds in market, 14 of which have already held at least one interim close. These 29 funds are seeking an aggregate $9.3bn in capital commitments.

The vast majority of the retail-focused funds currently fundraising are targeting European markets; 16 funds are targeting $6.2bn in equity. The largest of these funds is the CBRE European Shopping Centre Fund, which is seeking €450mn in capital commitments. Managed by CBRE Global Investors, the core-plus fund invests in dominant shopping centres across Continental Europe. Ten solely retail-focused funds are US-focused, targeting an aggregate $1.6bn. The largest of these is the $500mn, value-added O'Connor/Wafra Retail Partners fund, which targets high-quality retail assets in the US. Compared to Europe and the US, Asia has fewer funds on the road; only two real estate funds are currently in market, seeking an aggregate $1bn. There is only retail-focused fund in market focused outside the US, Europe or Asia, which is targeting $500mn.

Between 2006 and October 2012, 96 solely retail-focused funds held final closes, raising an aggregate $28.7bn from investors. Europe-focused funds raised the most capital, with $11.1bn in commitments secured  by 41 funds. Thirty-five US-focused funds raised $7.1bn in commitments, with Asia raising $7.5bn from 15 funds. Five Rest of World-focused funds raised an aggregate $3.0bn.

2007 was the strongest year for fundraising for solely-retail focused real estate funds. Twenty eight vehicles held final closes, raising an aggregate $10.1bn in capital commitments. The number of funds successfully holding final closes fell in 2008 to 17 funds closing on an aggregate $5.9bn. Following the global economic crisis, just eight funds held final closes in 2009, raising $800mn from investors. The fundraising environment improved slightly in 2010, with 10 funds raising an aggregate $1.7bn in equity. 2011 saw continuing improvement with 12 retail-focused funds holding final closes, raising a combined total of $4.2bn from investors. Between January and October 2012, five retail-focused funds have held final closes, raising $1.9bn.

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