LONDON—2014 has witnessed the largest amount of capital raisedby Europe-focused funds since 2007, demonstratingan overwhelming growth in appetite for European real estate, andopportunistic or distressed opportunities in particular.

|

Over $26 billion (€21B) has been raised so farthis year for Europe-focused real estate funds, more than in anyother year except 2007, when $29 billion (€23B) was raised. As aresult of the significant growth in European fundraising over thepast 12 months, dry powder for Europe-focused funds currentlystands at an all-time high of nearly $65 billion(€52B) – a 44% increase on December 2013. This information comesfrom a recent report by London-based Preqin.

|

“The European real estate market is awash with capital followingthe strongest fundraising year for the region since 2007,” saidAndrew Moylan, Head of real assets products forPrequin. “Total capital raised for the region has exceeded €20billion ($25B) so far this year, a level of capital not seen duringan entire year of European fundraising since before the globalfinancial crisis.”

|

Moylan says it is also notable that many of the largest USprivate equity firms have returned to Europe.

|

“Over half of the capital that has been raised this year hascome from non-Europe-based managers, with the likes of BlackstoneGroup, Lone Star Funds and Starwood Capital Group all targetingEuropean opportunities,” he said. “With many commentatorshighlighting the wealth of distressed opportunities across thecontinent, this large amount of capital does have the potential ofdriving up asset valuations and ensuring that deal-making is highlycompetitive.”

|

Private Real Estate Fundraising Key Facts:

|

· 44% of global capital raised in 2014 YTD is for Europe-focusedfunds, up from 17% of capital raised in 2013.

|

· Opportunistic and distressed are the two most prominentEurope-focused fund types raised in 2014 YTD, with funds of thesestrategies raising a combined $15.3 billion (€12.3B).

|

· Over half (55%) of capital raised for Europe-focused funds sofar this year is from non-Europeheadquartered managers,significantly more than the 26% of capital raised in 2013.

|

· A quarter of North America-based institutional investors arecurrently targeting Europe-focused real estate funds, up from 16%in 2013.

|

· Blackstone Real Estate Partners Europe IV became the largestever solely Europe-focused fund when it closed on $6.3 billion(€5.1B) in March 2014*, while 50% of the $8.95 billion (€7.2B) LoneStar Fund IX, which closed in July, is expected to be invested inEurope. (*Re-opened to existing investors, with an additionaltarget of $1.86 billion (€1.5B).

|

· The average time taken for Europe-focused real estate funds toreach a final close in 2014 has been 16 months, compared to 19months for North America-focused funds.

|

For more information and analysis, see the fullreport from Preqin.

|

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

David Phillips

David Phillips is a Chicago-based freelance writer and consultant with more than 20 years experience in business and community news. He also has extensive reporting experience in the food manufacturing industry for national trade publications.