Preqin-2018年房地产市场报告（英文）-2018.5-17页-3mb

Summary of Real Estate Industry Insights

Core Content

This document provides an in-depth analysis of the real estate investment landscape, focusing on retail investment and sovereign wealth fund (SWF) participation in the asset class. It also highlights industry news and deal activity in key markets such as New York, California, and Europe.

Main Points

Retail Investment Trends

• Challenges in Retail: The retail sector faces pressure from online retailers, leading to reduced in-store spending and declining margins. In the UK, rising wages and business rates have impacted retail performance.
• PERE Retail Activity: Despite these challenges, private equity real estate (PERE) retail transactions continue. The aggregate deal value for retail assets was $45bn in 2015, but dropped to $7.0bn in 2016 and has since stabilized.
• Deal Flow: Retail deal flow has declined as a proportion of total PERE deals, from 19% in 2013 to 14% in 2018. However, portfolio deals represent 41% of PERE retail transaction value, higher than office (22%) and residential (29%) properties.
• Key Markets:
  • United States: New York City and Las Vegas are the top retail deal markets, with New York contributing $5.8bn and Las Vegas $2.7bn since 2013.
  • United Kingdom: London is the largest retail market in Europe, accounting for 14% of UK deal flow. Birmingham's Grand Central was the largest UK retail deal in 2016.
  • Asia: Tokyo and Sydney are the most active cities in Asia for retail deals. Tokyo saw a $1.2bn transaction involving H&M and Zara, while Sydney had the Indooroopilly Shopping Centre deal.
• Fundraising:
  • Retail-focused funds represent 33% of all closed-end private real estate capital raised in 2017.
  • Fundraising for retail has increased since 2009, reaching $43bn in 2017.
  • Only 13% of investors saw retail as the best opportunity in 2018, but many still allocate capital to the sector.
  • Solely retail-focused funds target $7.3bn, down from $11bn in 2017.

Sovereign Wealth Fund (SWF) Real Estate Participation

• SWF Involvement: 62% of SWFs invest in real estate, second only to infrastructure (64%).
• AUM and Allocations:
  • All SWFs with at least $100bn in AUM invest in real estate.
  • The average allocation to real estate is 7.3%, with a target of 11.0%.
  • 60% of SWFs have a target allocation of 10.0% or more.
• Investment Preferences:
  • Most SWFs (53%) prefer core strategies, followed closely by opportunistic strategies (51%).
  • Secondaries and fund of funds are less favored.
• Regional Preferences:
  • 62% of SWFs have a global investment strategy.
  • North America and Europe are the top regions, each targeted by 68% of SWFs.
  • Asia is targeted by 55% of SWFs, with developed countries like Hong Kong, Singapore, and Japan being the most attractive.
• Notable Transactions:
  • In 2017, CIC acquired Logicor for €12.3bn, the largest real estate transaction of the year.
  • SWFs are below their target real estate allocations and have significant long-term capital deployment potential.

Key Information

• Market Share: Retail is the second-largest asset class in terms of deal value after industrial.
• Deal Value: The largest PERE retail deal in the US was for Fashion Show Mall in Las Vegas ($1.25bn), while in the UK it was Birmingham's Grand Central (£335mn).
• Fundraising Trends: Capital raised for retail-focused funds has increased steadily since 2009, but remains below pre-crisis levels.
• SWF Activity: SWFs are major players in real estate investment, with a growing preference for niche sectors like student accommodation, hospitality, and logistics.
• Investor Sentiment: While retail investment remains cautious, it continues to attract interest from institutional investors and SWFs.

Conclusion

Despite the challenges posed by online retail and shifting consumer behavior, the real estate market, particularly retail, continues to attract investment. Private equity real estate (PERE) deals show resilience, with key markets like the US, UK, and Asia remaining active. Sovereign wealth funds are also significant contributors to the real estate sector, with a growing interest in diversified and niche investments. The outlook remains cautiously optimistic, with investors recognizing the long-term value of retail assets even amid market uncertainties.