LONDON—More capital was distributed to private real estate fund investors in 2013 than in any year previously, with a total of $138 billion returned to investors globally as a result of managers selling assets, Preqin said Thursday. That's more than double the $67 billion they received in 2012.

“The increase in valuations in many real estate markets around the world, and improving confidence leading to a good supply of potential buyers, has enabled fund managers to realize many of their investments,” says Andrew Moylan, head of real assets products for Preqin, headquartered in London and New York City. “2013 was a record year in terms of distributions to investors and the first year since 2003 in which the amount of capital distributed to limited partners exceeded the amount of capital called up to make new investments.” Accordingly, Moylan says, “these institutional investors have more capital available to reinvest in real estate funds, and many plan to place large amounts into private real estate funds in the coming year.”

With an uptick in capital distributions, many investors have been able to re-invest previously tied up capital into new funds, further bolstering the private real estate fundraising market. As a result, Preqin's recent investor survey revealed that institutional commitments to commercial real estate increased over the past year, with 52% of investors surveyed last month saying that they had committed to real estate funds in the previous 12 months, more than in any other period since December 2009.

Last year also saw capital distributions exceed the amount invested in real estate, with $92 billion of equity deployed by private fund managers in real estate assets compared to $138 billion retruned. The year prior had seen the highest level of capital called by private real estate managers in any single year, with $130 billion in capital called from investors over the year. This narrowly surpassed the $129 billion called in 2007, and was nearly double the amount of total distributions.

With distributions increasing and investors therefore able to access previously tied-up capital, 82% of real estate fund managers believe investor appetite for private real estate investment has increased over the past 12 months. However, Preqin notes that investors have become increasingly demanding regarding information on investments and performance, and as a result 38% of real estate firms surveyed said they'd be bolstering their investor relations teams over the next 12 months.

Fifty-five percent of active institutional investors plan to invest $100 million or more in private real estate in the coming year. That compares to just 40% of investors surveyed a year ago.

Fund managers remain confident of finding attractive opportunities in real estate, Preqin says. Sixty-three percent of managers expect to invest more capital over the next 12 months than they did in the past year, with 37% saying the increase in investments will be significant, while just 14% expect to invest less.