Fundraising and deal values have yet to hit pre-pandemic levels, but quarter-on-quarter increases show promise

  • KKR has acquired a portfolio of six Class A industrial logistics properties for roughly $377mn, located across the US, including in Seattle, Atlanta, Philadelphia, New Jersey, and the San Francisco Bay Area.

  • The acquisition of this additional two million square feet brings KKR’s total warehouse acquisitions in the US to nearly six million square feet since the start of 2024.

  • ‘We think high-quality assets in infill locations near diverse demand drivers and accommodative labor forces will be increasingly difficult to reproduce in the coming years,’ said Ben Brudney, a Managing Director in the Real Estate group at KKR.

  • KKR has $75bn of real estate AUM and currently manages 25 funds, with an estimated dry powder of $4.4bn, according to Preqin data.

August 20, 2024 (Preqin News) – Real estate fundraising is increasing after hitting a nadir in the third quarter of 2023. Aggregate raised capital increased by $0.6bn to $33.0bn in Q2 this year compared with Q1, as detailed in the Real Estate Q2 2024: Preqin Quarterly Update.

The vast majority of capital raised last quarter is targeting North America, with $28.4bn raised over 122 funds. The top five largest funds closed in the second quarter were all North America-oriented.

Global transaction value also rose in Q2, hitting $35.7bn, a 15.5% increase from Q1. Although North America is responsible for a large portion of this ($23.1bn), Europe’s deal value doubled quarter-on-quarter, from $3.4bn in Q1 to $7.9bn in Q2. There was a contraction in APAC deal value, from $6.6bn in Q1 to $4.6bn in Q2.

KKR led the two biggest real estate deals in Q2, a $2.1bn residential property portfolio it acquired from Quarterra Multifamily, and a $1.6bn student housing portfolio acquired from Blackstone Group, both of which are in the US.

Real estate fundraising and deal value are beginning to recover from the slump induced by the COVID-19 pandemic, but Q2 figures for fundraising and deal value are still 32.0% and 69.9% below those from Q4 2019.

The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.