Global asset managers achieve record US$3.6 trillion of real estate AUM
- CapitaLand, ARA Asset Management Limited and GLP dominate Asia Pacific real estate AUM ranking with US$160.8 billion in total Asia Pacific real estate AUM
- Leading five managers globally exceed US$130 billion in total real estate AUM each
June 3, 2020, Hong Kong – Total global real estate assets under management (AUM) hit a record US$3.6 trillion at the end of 2019, according to the Fund Manager Survey 2020, published today by ANREV, INREV and NCREIF. In Asia Pacific, total real estate AUM amounted to US$608.2 billion at the end of 2019, up from US$586.2 billion a year prior.
This year’s results reflect a sizeable rise of 14.0% on 2018’s tally of US$3.2 billion, despite the fact that a number of managers were unable to respond to the survey because of the COVID-19 global health pandemic. The growth in total AUM was largely attributable to increased investor inflows and capital appreciation.
Managers focused on Asia Pacific contributed 16.7% to total AUM, while North American strategies accounted for the highest percentage of total AUM at 36.6%. This is closely followed by those in Europe with 33.8%. Global strategies meanwhile account for 12.3%.
CapitaLand tops Asia Pacific AUM ranking, Blackstone leads global rankings
CapitaLand maintained its top spot in the fund manager ranking for Asia Pacific AUM, with US$62.5 billion allocated to real estate in the region, closely followed by ARA Asset Management Limited with US$60 billion. GLP ranks third with US$38.3 billion. With US$160.8 billion in Asia Pacific AUM combined, the three together account for just over a quarter (27.3%) of total AUM committed to real estate in Asia Pacific.
Top 10 fund managers by Asia Pacific real estate AUM
Source: ANREV / INREV / NCREIF Fund Manager Survey 2020
Blackstone tops the list of real estate AUM globally with nearly US$280 billion, ahead of Brookfield Asset Management with US$201.9 billion and PGIM Real Estate with US$179.2 billion. Nuveen and Hines complete the line-up of top five managers with US$132.7 billion and US$132 billion respectively.
Collectively, this year’s top 10 asset managers globally account for around 40% of the overall total, each achieving at least US$100 billion of AUM.
Top 10 fund managers by global real estate AUM
Source: ANREV / INREV / NCREIF Fund Manager Survey 2020
Despite the gap in average AUM separating the top 10 managers from the rest, the overall growth rate for medium and smaller managers outstripped that for larger managers at 18.6% and 11.5% respectively.
Non-listed vehicles and market consolidation
Non-listed real estate vehicles – which include funds, separate accounts, joint ventures, club deals, funds of funds and debt products – amounted to a substantial 82.2% (US$3 trillion) of total AUM in 2019. This dominance is also reflected in Asia Pacific, where such vehicles account for 71.2% of AUM allocated to real estate in the region. However, the region is not as reliant on these products as in Europe, where non-listed makes up more than 90% of AUM, and in North America where it is 79.3%.
Within this grouping, non-listed funds represent the majority of non-listed real estate vehicle AUM in Asia Pacific, accounting for 52.7% – a trend reflected globally where funds account for 44.6% of non-listed real estate vehicles in total, making them the most popular form of investment structure regardless of geography.
Blackstone has jumped up in the ranking of top 10 managers by non-listed real estate funds AUM in Asia Pacific, from 5th place with US$13.3 billion in AUM in 2018 to first place with US$19.2 billion in 2019. CapitaLand meanwhile edged ahead of GLP to take second place with US$18.1 billion, compared with third place with US$17.8 billion in 2018. GLP meanwhile had Asia Pacific non-listed real estate funds AUM of US$17.7 billion in 2019, down from US$19 billion in 2018.
Of the notable alternative vehicle types, JVs and club deals are more prevalent in Asia Pacific than in Europe and North America, amounting to 29.5% of non-listed real estate AUM in the region compared to 9.5% and 18.5% respectively for its counterparts. Non-listed debt products are much more preferred in North America than elsewhere, where they account for 14.3% of AUM, compared with 3.6% in Europe and 1.3% in Asia Pacific.
The survey results also highlight the continuing trend for market consolidation. In 2019, 20% of respondents reported having been involved in M&A activity over the past decade, with a third of them citing a desire to extend their geographic reach as a key motivation.
Amélie Delaunay, Director of Research and Professional Standards at ANREV, said “After six consecutive years of steady growth, the growth in real estate AUM globally and in Asia Pacific accelerated significantly in 2019 on the back of continued and increasing investor interest in the asset class. The survey points to continuing consolidation in the industry, which is supported by investors continuing to opt for the simplicity of dealing with a smaller number of global managers with the breadth and depth to access regions like Asia Pacific, as well as current market conditions. It is also interesting to see that the largest managers in Asia Pacific have the option to offer listed and non-listed products to their investors, unlike the largest managers in Europe and North America, some of which are the real estate investment manager arms of large investors.”
