Fund managers reached a new record of US$2.5 trillion of real estate assets under management

• Top 10 largest fund managers represent 38.8% of total AUM
• JVs and club deals make up a material part of the value in Asia Pacific (28.0%)
• Pension funds continue to be the dominant investor type for non-listed direct real estate

As of 31 December 2016, the total real estateassets under management (AUM) was US$2.5 trillion compared to US$2.19 trillion at the end of 2015. The top 3 fund managers’ assets under management comprises over US$420 billion and the top 50 fund managers increase their assets under management by more than US$4 billion each.

The Blackstone Group tops the list with US$150.9 billion of gross asset value (GAV) of non-listed real estate assets under management. Following closely, Brookfield Asset Management ranks second with US$148.0 billion of total real estate AUM. PGIM occupies the third position with US$121.7 billion of global real estate AUM.

With the Paris Agreement ratified and the forthcoming release of the Financial Stability Board's Taskforce on Climate Related Financial Disclosure, there has seemingly never been more global momentum responding to the challenge of climate change. Furthermore, reporting from the UNPRI and the UN Environment Programme's Finance Initiative highlights both the physical and transition risks posed by Climate change. As Asset managers, how can we ensure our assets are best prepared for rising temperatures, increased extreme weather event frequencies and electricity shortages, as the world shifts to a low-carbon economy with the associated impacts on markets and global capital flows as mangers seek to reduce the carbon risk of their portfolios.

This short webinar discusses on the implication of these global trends on Real Estate investment and the property sector.

The INREV Sustainability Reporting Guidelines have been revised to form a disclosure framework that delivers meaningful data to increase visibility and insight into a vehicle’s ESG efforts and also details their next course of action for improvements. We aim to provide a coherent framework for ESG reporting in line with annual financial reporting from 2017 and present a clear picture from the vehicle’s strategy through to environmental key performance indicators.

At this webinar, you will receive updates and guidance on the implementation and consistent reporting methodologies the INREV Sustainability Guidelines with a session especially focused for Asian Investors.  

EXECUTIVE SUMMARY

• The nascent signs of a new economic pattern marked by higher interest rates and increased inflation has begun to show. This
“reflation” environment will have direct implication for U.S. property markets and the economy as a whole.

• Commercial property has long been considered to be an asset class that provides some degree of protection from the pernicious
effects of inflation, and historically, in rising interest rate environments, investors have been willing to allow the yield spread to
compress for some period of time.

• Property sector performance is likely to reflect underlying property market fundamentals more than capital market changes as long as
the economic and property market fundamentals do not change significantly.

Data contributions were received from 84 funds with a total gross asset value of US$93.6 billion. The All Asia Index headline return was 10.6% in local currency for 2016 compared with 12.1% in 2015.

Further detail of the sub-indices which cover fund style and various geographies can be found in the full report.

We would like to thank all the companies that supported the data collection exercise and look forward to your continued support in the next round of data collection next year.

Together with the release of Annual Index 2016, ANREV has recalculated the Q4 2016 Quarterly Index. Members can move to ANREV Analysis Tool to check out the updated result.

To participate in the ANREV Index, please contact Henry Lam at [email protected] to take part in this industry-led initiative or if you have any questions about the ANREV Index.

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In this issue, we have included: 

ANREV would like to thank the Regulatory and Tax committee who compiled the newsletter.

For further details on the committee, please click here.