They said it
“We believe we’re already operating in the next phase of the cycle in real estate.”
Brad Hyler, managing partner, real estate, Brookfield Asset Management, speaking at the firm’s investor day presentation last week. Check out our coverage here.
What’s new
A fruitful harvest
Real estate was no laggard at Ares, which has followed a record second-quarter fundraising haul with a new fundraising milestone in the sector. The Los Angeles-based manager closed Ares US Real Estate Opportunity Fund IV, its fourth North American opportunistic vehicle, on Monday with $3.3 billion in commitments. It is the largest real estate fund for the manager and the fourth-largest private real estate equity fund closed this year, according to PERE data. The news comes weeks after Ares said it raised a record $26 billion across all of its lines of business in the second quarter.
The close, along with capital raised for another opportunistic fund, Ares European Real Estate Fund VI, gives Ares $5.5 billion in dry powder to capitalize on upcoming debt maturities across the US and Europe. The firm expects to hold a first close for another fund, Ares European Property Enhancement Partners IV, by the end of the month. “We believe the mounting need for capital infusions to bridge gaps created by the deleveraging that has occurred over the past two years has yielded an attractive investable universe of high-quality real estate in desirable markets,” said David Roth, partner and co-head of Ares US Real Estate.
Two-part fundraise
PERE also revealed this week that BGO has completed its largest European capital raise to date, raising nearly €2 billion for BentallGreenOak Europe IV. The capital raise occurred in two parts: one for the main fund and one for the co-investment vehicle. The Miami-based manager launched Fund IV in October 2021 and closed on €1.46 billion for the main fund in May 2023, according to PERE data.
BGO spent the next year amassing €520 million in co-investment capital – the largest co-investment amount raised to date for the value-add fund series. The co-investment capital raise was driven in part by Fund IV’s investments in large-scale platforms, including Nordics-focused data center developer and operator Bulk Infrastructure and Italian logistics company Techbau. For more on the fundraise and where else Fund IV’s capital will be deployed, read the full story here.
Lone Star’s short stack
One manager not celebrating a record fundraise last week was Dallas-based Lone Star Funds. But the firm could demonstrate it was walking the talk when investing the proceeds of its seventh real estate opportunity fund, picking up a six million-square-foot UK portfolio of mostly industrial properties for around $750 million. It was the first deal made on behalf of Lone Star Real Estate Fund VII, which the manager closed after raising $2.7 billion in commitments – well short of its $6 billion target and the smallest of any fund in the series since its first iteration in 2008. The series’ sixth fund closed in 2019 with $4.6 billion.
Jérôme Foulon, Lone Star’s co-head of commercial real estate, told PERE the asset manager was “very happy” with the haul, but acknowledged liquidity challenges for investors amid inflation and high interest rates. Foulon framed the closure as a proactive move, enabling Lone Star to seize a buying opportunity as banks reduce their commercial real estate exposure, particularly in the US. “We are not afraid to come back to our investors if the capital is deployed in the next 15 months,” Foulon said. “We want to take advantage of the pressure on the financial system.”
Read the full story here.
Trending topics
Living it up
Aviva Investors is in the midst of a strategy shift for its private real estate business. Streamlining capital lines, boosting third-party capital management activities and moving away from benchmark-matching strategies are among the key tenets of the London-based asset manager’s new “active style,” Ben Sanderson, managing director of real estate, tells PERE in an interview published this week.
One notable outcome of this “more selective” approach is the firm’s intention to increase its real estate portfolio’s residential allocation from 7 percent at present to around 20 percent. To achieve this, the insurance-backed manager will invest more in mainland Europe, where it currently has just less than £1 billion ($1.3 billion; €1.2 billion) deployed in real estate, compared with around £15 billion in its native UK. To that effect, the firm has recently secured a multifamily development site in Palma de Mallorca, Spain, for a gross asset value of €120 million, as revealed by PERE this week. The transaction was made on behalf of Aviva Investors’ funds, which excludes external capital, and is the firm’s fourth and largest investment to date in its build-to-rent partnership with Spanish developer Layetana Living.
Hitting restart
The 400-plus PERE Network members at PERE Japan Korea Week heard from multiple investors looking to ramp up in real estate last week. Public Officials Benefit Association was one such institution, with plans to re-engage in different parts of the property market. In Seoul, POBA’s head of overseas real estate Harry Song said the Korean pension fund was resuming real estate equity investments after hitting pause in 2022. This follows the investor’s re-entry into the public real estate sector and real estate credit last year. Within the real estate equity market, POBA has returned to office investing after a seven-year hiatus and made an unsuccessful bid on a London office building earlier this year. POBA’s renewed interest in real estate equity, however, stands apart from most other Korean investors, which remain cautious about new investments in the asset class.
Japanese investors, on the other hand, have a greater capacity to invest in real estate as they generally face fewer legacy issues than their Korean counterparts. For what this investor pool considers to be the most compelling areas of the property market, read our coverage here.
Investor Perspectives
What are investors thinking?
Each year, PERE and affiliate titles of parent PEI Group canvass sentiment and appetite across the world’s private capital markets. What do we want to know? How institutional investors from each of the major regions are thinking about optimally positioning the capital they are stewarding in the current global context. Naturally, our questions change with the times and the 2025 Investor Perspectives Survey is no different with the inclusion of private real estate questions that address today’s predicaments. Among the topics in focus are asset allocations, investment plans, secondaries, manager relationships, due diligence, fundraising, artificial intelligence and ESG.
The survey is open now and investors wishing to participate should click here. It should take no more than 10 minutes to complete, the deadline for responses is October 4 and all responses are anonymous. To our investor readers, we look forward to collecting, aggregating and presenting your opinions to PERE’s global audience. Read prior Perspectives coverage here.
Data snapshot
Capital destinations
A Colliers report found that five EMEA markets rank among the top 10 global capital markets destinations, with the UK leading the way. Joined by Germany, France, Spain and the Netherlands, they account for 39 percent of global cross-border investing. The US ranks second, with Japan and China rounding out the top five most sought-after cross-border markets.
People
PGIM names its Price
PGIM Real Estate recruited a former BGO and CBRE Investment Management executive to help align its global investment strategies as business picks up outside North America. The real estate investment management arm of life insurance giant Prudential has brought in Richard Price as managing director and senior portfolio director, international equity – a newly created role aimed at coordinating its investment platforms across Europe, Asia Pacific and Latin America.
Price joins PGIM from BGO, where he spent the last three years as co-head of its proptech investment team and chief operating officer of its global capital raising and investor relations group. Before that, Price was chief executive of CBRE Global Investors’ Asia-Pacific region, based in Hong Kong. In the new role he will be based in San Francisco and report to PGIM Real Estate co-CEO Raimondo Amabile, who said in a statement the manager was “seeing renewed interest” in its international strategies as global real estate markets recover.
Deal spotlight
Cabot heads Down Under
Cabot Properties expanded its global portfolio with the acquisition of a logistics property in Sydney – its first transaction in Australia – according to a statement. The 210,000-square-foot property is among the first institutional-grade, multi-story logistics developments in the country. The Boston-based manager paid Chicago-based LaSalle Investment Management A$138 million ($92 million; €83 million) for the facility at 42-52 Raymond Avenue. This transaction follows the firm’s strategy of investing in infill industrial real estate globally. The latest purchase is part of Cabot’s value-add fund investment series, according to a source close to the deal. The firm held a final close for its largest fund yet, Industrial Value Fund VII, at $1.6 billion in January.
Investor watch
A merging investor
Future Fund, Australia’s sovereign wealth fund, has merged its infrastructure and real estate teams in an overhaul intended to “adapt to a changing investing environment,” the group said in a statement. Under Future Fund’s new structure, David Bluff, formerly head of private equity, will co-lead the real assets team as a senior managing director, along with Tammi Fisher, formerly the head of alternatives. Bluff will oversee the private equity and credit teams, while Fisher will lead the infrastructure and property teams. It is the third Australian investor to merge infrastructure and real estate in the past two years. AustralianSuper, a pension fund, last year gave Nik Kemp command of a combined team, creating the role of head of global real assets. In 2022, Australian Retirement Trust named Michael Weaver as its head of global real assets following the merger between QSuper and SunSuper.
This week’s investor meetings
Monday, September 16
- State Board of Administration of Florida
- California Public Employees’ Retirement System
- Kentucky Teachers’ Retirement System (KTRS)
- London Borough of Tower Hamlets Pension Fund
- Orange County Employees Retirement System
- Pompano Beach Police & Firefighters’ Retirement System
Tuesday, September 17
- Delaware Public Employees’ Retirement System
- Anne Arundel County Retirement & Pension System
- Baltimore City Fire and Police Employees’ Retirement System
- City of Southfield Employee Retirement System
- City of Tallahassee Pension Fund
- City of Tampa General Employees’ Retirement Fund
- Cumbria Local Government Pension Scheme
- Dorset County Pension Fund
- El Paso City Employees’ Pension Fund
- Houston Firefighters’ Relief and Retirement Fund
- Maryland State Retirement and Pension System
- New Mexico State Investment Council
- Ohio Public Employees Retirement System
- Pennsylvania State Employees’ Retirement System
- UC Investments
- Wisconsin Board of Commissioners of Public Lands
Wednesday, September 18
- Alaska Retirement Management Board
- Boston Retirement System
- California Public Employees’ Retirement System
- Chicago Firemen Annuity & Benefit Fund
- City of Atlanta Pension Investment Board
- City Of Austin Police Retirement System (CAPRS)
- London Borough of Enfield Pension Fund
- City of Grand Rapids General Retirement System
- City of Grand Rapids Police and Fire Retirement System
- Colorado Public Employees’ Retirement Association
- Detroit General Retirement System
- El Paso City Employees’ Pension Fund
- Fort Worth Employees’ Retirement Fund
- Howard County Retirement Plan
- Memphis Light, Gas and Water Retirement and Pension System
- New Castle County Employees’ Retirement System
- New York City Board of Education Retirement System
- New York City Employees’ Retirement System
- Oklahoma Police Pension and Retirement System
- Sacramento County Employees’ Retirement System (SCERS)
- Wales Pension Partnership
Thursday, September 19
- Teachers’ Retirement System of the City of New York
- Alaska Retirement Management Board
- Allegheny County Retirement System
- Chicago Municipal Employees’ Annuity and Benefit Fund
- Chicago Teachers’ Pension Fund
- City of Baltimore Employees’ Retirement System
- City of San Jose Police & Fire Department Retirement Plan
- Cornwall Council Pension Fund
- East Bay Municipal Utility District Employees Retirement System
- Gloucestershire County Council
- Kent County Council Superannuation Fund
- Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund of Chicago
- Los Angeles Fire & Police Pension System
- Macomb County Retirement System
- Miami Beach Firefighters’ and Police Officers’ Pension Plan
- Missouri Department of Transportation and Highway Patrol Employees’ Retirement System
- Missouri State Employees Retirement System (MOSERS)
- Pembroke Pines Firefighters & Police Officers Pension Fund
- Pennsylvania Municipal Retirement System
- Police & Fire Retirement System of the City of Detroit
- Public Employees’ REtirement System of Nevada
- San Diego County Employees’ Retirement Association
- School Employees’ Retirement System of Ohio
- Scottish Borders Council Pension Fund
- Sonoma County Employees’ Retirement Association
- Southeastern Pennsylvania Transportation Authority
- Teacher Retirement System of Texas
- University of Michigan
- City of Ann Arbor Employees’ Retirement System
- Virginia Retirement System
- Washington State Investment Board
Friday, September 20
- Avon Pension Fund
- Georgia Firefighters’ Pension Fund
- Illinois State Board of Investment
- Missouri Local Government Employees’ Retirement System
- Oklahoma Firefighters Pension & Retirement System
- Employees’ Retirement System of the State of Hawaii
- Kansas City (Missouri) Public School Retirement System
- Ventura County Employees’ Retirement Association
Today’s letter was prepared by Jonathan Brasse, with Evelyn Lee, Charlotte D’Souza, Greg Dool, Harrison Connery and McKenna Leavens contributing.
