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Private RE fundraising dips to lowest level since 2013

Privatereal estate fundraising fell to its lowest level in the third quarter since thefirst quarter of 2013, the latest data from research firm Preqin showed.

Insum, 32 fundraising vehicles raised $19 billion during the period, down from$31 billion raised by 46 vehicles in the second quarter. In thefirst quarter of 2013, the last time totals were as low, 48 vehicles raised $10billion.

Preqinnoted in its report that the third-quarter fundraising total could rise by asmuch as 15% "as more information becomes available."Andrew Moylan, Preqin's head of real estate products, still had a positive readon the market.

"The$19 billion raised is not far off recent quarters, and while fundraising thisyear has not quite reached the levels seen in 2015, there remains a great dealof institutional appetite for real estate," he said in the third-quarterreport, noting that half of the 10 largest real estate funds on the road haveheld interim closes.

Capitalconcentration is also increasing, and North America-focused funds aredominating the market. The 32 vehicles that closed during the third quartermarked the lowest number of closed funds since 2003.

Thereare currently 513 private real estate funds, targeting $182 billion, in themarket. Dry powder held by private equity real estate firmstotaled $230 billion as of October 2016, up from $210 billion at the end of2015.

Thethird quarter also saw a drop-off in the number of Europe-focused fundsclosing. Moylan said it is uncertain to what extent the outcome of the Brexitreferendum has impacted fundraising totals on the continent.