Judge it by the huge portfolio held by the world’s 100 biggest property investors, or by the handful of developers controlling the West End pipeline, but one thing is clear: property’s super-rich are set to get very much richer.
As the industry prepares to decamp to the South of France for a MIPIM whose outlook is the brightest for more than half a decade, there’s money to be made at home and abroad. And it’s perhaps easier than ever to identify who will be making the lion’s share.
For the first time, Estates Gazette has pulled together a list of investors with the largest property holdings in the world today. In many ways it’s surprising: the biggest are not necessarily the most headline-grabbing. It’s not sovereign wealth funds that dominate the top positions. Nor is it new money from Asia Pacific.
Top of the tree is Canada’s Brookfield Asset Management. With $108bn of assets, it is almost $19bn ahead of its nearest rival, CBRE Global Investors. Indeed, North American firms account for 37 of the top 100.
Overall this group holds property worth $2,900bn (£1,700bn). Equate that figure to GDP and they are generating enough wealth to be the fifth biggest economy on the planet. It’s simply gobsmacking.
And it’s not just on the world stage that wealth is concentrating. In London just five developers and the landed estates now account for more than half of the 13m sq ft West End pipeline set to be delivered over the next four years.
It is a situation dramatically different to previous cycles. The unavailability of debt over the past six years is to blame: only the big boys with access to a more diverse funding stream via the capital markets have been able to ready themselves for this upturn.
Will it change as we work through the cycle? In some senses, yes. Property remains a lucrative playground for entrepreneurs with bright ideas and, yes, access to non-bank finance. But in the main it is the bigger players than are likely to grow bigger still.
One caveat at the global level. It wasn’t European investors that trailed their US peers in our top 100. No prizes for guessing it was Asian money.
On our list this time around, there are 33 Asian investors with combined real estate holdings of $926bn.
As financial markets liberalise and investments diversify from domestic to overseas plays, expect this number to rise as the top tier of global real estate investors smash the $3,000bn barrier. It will be another symbolic mark of the strengthening of the global real estate industry. And, barring economic catastrophe, it will happen within the next year.
Did I mention MIPIM? As you read this, this bumper edition of EG – and much of the team that produced it – is en route to the South of France. We have a full programme of events to ensure you don’t miss a thing.
We will be broadcasting all five of our debates live online, enabling you to ask questions of our panels from the comfort and safety of your own desks.
From Monday, you will be able to read a special Global digital edition of EG, which will carry our top 100 investor ranking and much more. On Tuesday, we will produce a MIPIM preview, including a column from deputy London mayor Sir Edward Lister. On Wednesday, Thursday and Friday, keep up to speed with our digital daily editions.
And do download – or update – our New London app, produced in partnership with the NLA, the mayor’s office and Deloitte. It now boasts more than 500 projects – no wonder it was named as one of the best new business apps in the App Store last month: it truly is London’s live development app. And it’s now available online too.
Keep up to speed with all things MIPIM at www.estatesgazette.com/MIPIM
