Preqin, the global firm focused on providing alternatives data and insight, released its Real Estate Q2 2024: Preqin Quarterly Update report.
The report shows that aggregate real estate fundraising “increased by $0.6bn in Q2 2024 to $33bn from $32.4bn in Q1 2024, showing a continued but marginal gain.”
Then, in addition to capital raising, the global real estate market showed “signs of experiencing an upward trend in deal flow, driven by increasing confidence in the asset class.”
The total transaction value “rose by 15.5% from $30.9bn in Q1 2024 to $35.7bn by Q2 2024.”
Looking at real estate deal value trends by region, Henry Lam, AVP, Research Insights, lead author of the report, highlights “that Europe is particularly noteworthy in terms of real estate transactions.”
While deal volume contracted by 15.8% quarter-on-quarter, quarterly deal value “more than doubled to $7.9bn to a high not seen since Q2 2022.”
In North America, the total value of closed deals also “increased in Q2 2024 by 10.5% to $23.1bn from $20.9bn in Q1 2024.”
On the other hand, APAC experienced “a contraction in deal value, moving it back in line with the levels seen in the second half of 2023.”
Key report facts:
- Residential becomes the most transacted property type in Q2: From a global perspective, residential properties reclaimed the top spot as the most transacted property type by Q2 2024, accounting for 23% of the total deal value.
- North America-focused funds support revival: According to Preqin data, North America-focused funds displayed momentum, serving as the primary driver of the modest second-quarter gain, with capital raised growing by 30% to $28.4bn. Meanwhile, APAC- and Europe-focused vehicles declined.
- Strong demand for real estate debt funds: The strategy recorded strongest quarter-on-quarter growth of fundraising. Preqin analysts note that since the start of 2019, the proportion of capital raised by real estate debt funds has only been higher twice, in the third quarters of 2020 and 2022, reflecting current demand from investors in this kind of investment product.
Henry Lam, AVP, Research Insights, at Preqin says:
“Real estate fundraising and deal values have been steadily rebounding in recent quarters, reflecting a more positive market outlook among market participants. However, the path toward a complete recovery in the real estate investment market remains long, requiring investors to increase their asset allocation in real estate back to historical average levels and show commitment to fund managers, thus fueling deal flow.”