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Institutional Real Estate Inc
June 21, 2010: Property indices in Europe and the United States are reporting shrinking levels of depreciation in most markets; however, for many real estate investment managers, it’s still a work in progress as they battle through the deleveraging process and continue to take write-downs on assets. These trends are reflected in the findings of a recent global survey of real estate investment managers conducted by Feri Property Funds Research — a real estate research and information firm and the U.K. branch of Feri EuroRating Services AG — in association with Institutional Real Estate, Inc., a U.S.-based information and consulting firm.
The assets under management (AUM) of the 138 investment managers that responded to the 2009 survey totaled more than $1.3 trillion, reflecting an average firm size of $9.9 billion. The 2008 survey collected data from 113 firms with collective total assets of $1.2 trillion, representing an average size of $10.6 billion. Of the 84 investment managers that reported AUM for both 2008 and 2009, 52 percent showed a decline in the value of their portfolios. In the previous year’s survey, nearly 70 percent of respondents experienced a decline in AUM from 2007 to 2008. The average decline in 2009 AUM was 12 percent, compared with a 13 percent drop in 2008.
“Although the global real estate markets look much better today than they did 24 months ago, the process of repricing and deleveraging will take time,” states Geoffrey Dohrmann, president and CEO of Institutional Real Estate, Inc. “Many investment managers are still in recovery mode, trying to sort out issues with their existing property portfolios; however, it appears that the worst of the write-downs are behind us. More investors are jumping back into the market, especially in western Europe and Asia, where recovery has been more rapid than in other regions.”
For the 129 firms that provided a geographic breakout of their real estate assets, the largest share, 50.6 percent, was located in Europe. North America represented 36.4 percent of total AUM, while Asia and Australasia accounted for 7.0 percent and 4.5 percent, respectively. Assets in Latin America accounted for 1.0 percent of total AUM. Investors’ increasing interest in emerging markets in Asia and South America are reflected in this year’s totals; in 2008’s survey, assets in Asia represented only 5.2 percent of the total AUM, while Latin America weighed in at 0.6 percent.
The survey results also reveal that the industry remains highly concentrated, though less so than a decade ago. The top 20 firms in this year’s survey manage nearly 60 percent of the total assets, while the other 118 investment managers account for the remaining 40 percent.
“Over the past nine years, since starting our research business, the real estate fund management landscape has changed considerably, with mergers, acquisitions, new set-ups and disinvestments,” notes Jane Fear, manager of Feri Property Funds Research. “In the current climate, we are likely to see a lot more of this activity, and we feel that 2010 could prove to be a landmark year.”
ING Real Estate Investment Management held on to its No. 1 ranking with more than $92.2 billion in total global real estate assets under management at year-end 2009. ING also boasts the most assets in North America with approximately $44.9 billion, while AXA Real Estate Investment Managers has the largest European asset base at $54.8 billion. In Australasia, AMP Capital Investors Property manages approximately $15.2 billion of real estate assets, while the top asset manager in Asia — Morgan Stanley Real Estate — controls approximately $13.3 billion. The largest investment manager in Latin America is Brookfield Asset Management, which oversees more than $5.8 billion of assets.
Feri Property Funds Research, the U.K. arm of Feri EuroRating Services AG, is a real estate research and consulting business that specializes in understanding and tracking the sources of capital, the collective investment vehicles and the fund managers who make up this global real estate universe.
Founded in 1987, San Ramon, Calif.–based Institutional Real Estate, Inc. (IREI) is a global publishing and consulting company focused on the institutional real estate marketplace. IREI produces a number of industry special reports and publications, and is the producer of several of the industry’s top-rated conferences.
SOURCE Institutional Real Estate, Inc.
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Real Estate Investment Managers Book More Write Downs in 2009 is brought to you by SimplifyEm Pay Rent Online and Property Management SoftwareYou might also want to read:
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