Brookfield overtakes CBRE as top real estate manager

Los Angeles-based CBRE Global Investors has lost its position as the world’s largest real estate fund manager.

Data from Inrev, the European Association for Investors in Non-listed Real Estate Vehicles, and Anrev, its Asian peer, indicate CBRE’s assets under management slipped from €72.7bn to €69.6bn during 2012. This allowed the New York-listed group to be leapfrogged by Brookfield Asset Management, a Toronto-based alternatives house, which saw its assets jump by €18bn to €83bn.

The duo edged out Blackstone Group, with assets of €67bn, UBS Global Asset Management (€49bn) and Axa Real Estate (€45.3bn).

Deutsche Asset & Wealth Management, formerly known as Rreef Real Estate, also fell, slipping from fifth to eighth in the rankings as its assets declined from €44.4bn to €40.6bn.

Brookfield’s ascent coincides with improving investor sentiment towards the sector, with the volume of capital raised by non-listed European real estate funds rising to €11.5bn during 2012, the highest figure since 2008, although still well below 2007’s pre-crisis peak of €29.6bn.

This partial rebound occurred despite deteriorating performance, with the average fund producing a total return of minus 0.6 per cent in 2012, compared with a gain of 3.6 per cent in 2011.

Casper Hesp, director of research and market information at Inrev, described the inflows as “encouraging”, adding: “They indicate that investors believe the market has reached its lowest point and are committing capital once again.”

A further €9.5bn was raised for separate accounts and €4bn for joint ventures and club deals. About 37 per cent of the total was invested in higher-risk “opportunity” or “valued added” funds, rather then lower-risk “core” vehicles, up from just 14 per cent in 2011.

“Driven by the desire for better yields than are currently available in the oversubscribed core market, investors appear to be searching for options further up the risk curve,” added Mr Hesp.

Three-quarters of all money raised for single-country funds was directed towards Germany, the UK and the Nordic countries, suggesting southern Europe remains out of favour.

Pension funds were the biggest investors across all product types, with three-quarters of money for closed end funds coming from European investors.