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Brookfield Loses Crown as World’s Biggest Property Manager

New York rival Blackstone overtakes Brookfield for real estate assets under management for the first time since 2013.

  • Joe McGrath

Canadian asset manager Brookfield has lost its spot as the world’s largest fund manager by total real estate assets under management, according to research published today.

The survey, conducted by three property trade groups – Inrev, Anrev, and Ncreif – found that Brookfield has been replaced at the top of the list of global real estate fund managers by Blackstone, which last topped the annual list back in 2013.

As of the end of December 2016, Blackstone had €143.2 billion ($160.4 billion) in total assets under management, compared to €140.5 billion for Brookfield Asset Management.

Last year’s report – which totaled assets for the year ending December 2015 – had Blackstone with €135.3 billion and Brookfield with €137.3 billion. Brookfield did not respond to a request for comment. Blackstone declined to comment.

Blackstone was acquisitive during 2016, snapping up German real estate business OfficeFirst Immobilien, buying an office complex from Deutsche Office with Quantum Capital, and acquiring a retail complex in Ireland.

It signaled its intentions at the beginning of 2016 by establishing a property management company to look after Peter Cooper village, the New York residential area it bought with Ivanhoe Cambridge a month earlier.

The property trade groups’ report was based on a global survey of 177 fund managers. It found that the average assets under management across respondents stood at €13.7 billion at the end of 2016, up from €13.1 billion at the end of 2015. This increase was even more noticeable for the larger players. The average assets under management for the companies in the top 50 stood at €40.8 billion, compared to €35.6 billion in the previous year’s survey. Real estate vehicles with European strategies totaled €405.7 billion.

Duncan Owen, global head of real estate at Schroders, said the appeal of real estate as a diversifier from public markets has been growing, with pan-European real estate strategies proving particularly popular right now.

“Overseas investors are investing because they like the U.K. and London, because it is a safe haven and the legal system is very attractive,” he explained. “Also now with weak sterling currency the price is more attractive than the previous five years.”

The report attributed the rise in assets across firms to continued growth in interest from pension funds and insurance companies, which now account for 63.7% of assets under management in non-listed funds and private real estate investment trusts (REITs).

Julian Sampson, lending and real estate partner at U.K. law firm TWM, said the growth of REITs has enabled more transparency in valuations and created secondary interests that extend “well beyond the front door of an office building.”

Sampson added that while prime assets will always be the most popular real estate investment, other assets in student accommodation, the privately rented sector, and direct lending are increasingly being considered by institutional investors. “The mechanism for investment does seem to be changing,” he said.