MIPIM 2016: A record amount of capital invested into real estate funds caused a dramatic cut in fund raising in 2015, according to Cushman & Wakefield.
The real estate investment market had $443bn of capital to invest in 2015, the highest amount seen since 2009, according to the company’s 12th Great Wall of Money Report.
However, the amount of investment capital available has led to curtailed capital raising in 2015 as funds concentrated on deployment through 2015.
New capital raised over the year was just 3% higher than 2014, a year that saw a 21% rise in capital being introduced to real estate investment.
Of 2015’s increase, new capital committed by investors rose by less than 2% over 2015 in both EMEA and the US to $143bn and $169bn respectively. Asia, while still the smallest investment market, was healthier with an 8% increase in available capital to $131bn as domestic investors invested more heavily in the region.
That funds were more concentrated on deploying capital than raising was shown in a 1% fall in ready equity from $408bn to $407bn. This left $36bn of committed capital undrawn by the year end, compared with $21bn in 2014.
In EMEA the deployable capital was down by 4% year-on-year to $131bn, while favourable currency and interest rates in the US boosted ready capital by 1%. Asia, by contrast, saw an increase in ready capital of 8%.
EMEA and Asia remain the largest markets for foreign money, while the Americas have only 23% of capital coming from outside of the region.
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