Barings Aims To Raise €2bn Of New Capital In 2022 as It Announces Closing €1.7 Billion In 2021
Barings, one of the world’s largest diversified real estate investment managers, has revealed an ambitious target of raising over €2 billion of new capital in 2022 in Europe and Asia Pacific, announcing that it closed on €1.7 billion of new commitments in 2021 – up 42% on 2020.
- Barings secured €1.7 billion of new commitments in 2021
- Real estate equity transacted deals worth €1.76 billion and debt team closed more than €1 billion
- Office and logistics deal volumes reached similar levels, as fewer but larger logistics assets transacted
Barings secured the €1.7 billion of new investor commitments across equity and debt, compared to €1.2 billion in 2020. The global investment manager also revealed that its equity division transacted 18 acquisitions and eight sales in 2021 with a total value of €1.76 billion compared to €1.5bn in 2020, while its real estate debt team originated and closed over €1 billion of deals.
Notable transactions from 2021 include:
- The acquisition of a logistics development portfolio in the Nordics for above €200m on behalf of a value-add strategy
- The acquisition of three core office assets in Berlin, Düsseldorf and Cologne on behalf of a core strategy
- The acquisition of four logistics assets via forward transactions in Italy, France, the UK and the Nordics
- The disposal of a pan-European logistics portfolio consisting of ten assets for €264 million as part of a core realisation strategy, delivering an IRR in excess of 25%
- The sale of an office asset in Milan, realising returns in excess of 60% IRR and a logistics asset in Madrid, which realised returns in excess of 40% IRR both as part of a value-add strategy
The UK saw the greatest levels of acquisition volumes for Barings across real estate equity, with €540 million committed and more already in the 2022 pipeline. Office and logistics deal volumes reached a near equilibrium, with offices representing 47% of deals and logistics at 43%. The remaining 10% was in residential, including build-to-rent (BTR) and purpose-built student accommodation (PBSA), in which deals totalled €125 million – which is triple the amount Barings invested in 2020 and will be a major focus for 2022
The proportion of logistics increased year-on-year from €480 million in 2020 to €560 million in 2021, driven by fewer but larger lot sizes, which will continue to be a trend Barings pursues in 2022.
In 2021, Barings maintained a similar level of core acquisitions at c. €200 million, while there has been a significant shift from core+ (€260 million in 2021 compared to €661 million in 2020) to value-add, which soared from €331 million in 2020 to €835 million in 2021
In a reflection of the competitiveness of the market, the year-on-year volume of forward funding transactions increased significantly for the second year in a row from €286 million in 2020 to nearly double that in 2021 at €538 million.
Charles Weeks, Head of European and Asia Pacific Real Estate, said: “2021 was an excellent year for Barings in Europe and Asia Pacific equity and debt, with all investment accounts outperforming their ‘since inception’ benchmark target returns and with billions of euros’ worth of transactions closed.
“We’ve already had a very active start to 2022, supported by the strong pipeline we built up over 2021, and are aiming to increase the number of transactions, source larger deals, and increasingly explore alternative and emerging sectors, such as co-living, that have significant potential of offering very attractive returns. I would like to thank all our clients for their continued support in 2021 and we look forward to working together to deliver on their real estate strategies in the coming years.”
Gunther Deutsch, Head of Europe Real Estate Transactions at Barings, said: “We have had a record year in terms of transaction volumes and are geared for even more in 2022. Offices, logistics and residential (build-to-rent, purpose-built student accommodation and co-living) assets will continue to be a primary focus in 2022. Our local offices in the seven European jurisdictions in which we work – the Nordics, the Netherlands, Germany, the UK, Italy, France and Spain – will ensure that we are quick and competitive in identifying and acquiring investment opportunities. A particular focus for 2022 is on developer joint ventures across all sectors.”
Sam Mellor, Head of Europe & Asia-Pacific Real Estate Debt at Barings, said: “We saw a notable increase in investor appetite for real estate debt in the past year, from core to value-add, and believe this will continue at pace in 2022. Our activity in Europe is market-leading and we made great strides in 2021 on our Asia-Pacific debt offering, having completed our first real estate debt transaction.”
Barings Real Estate
Barings Real Estate (BRE) offers a broad range of global investment opportunities across the private debt and equity investment markets. BRE invests in all major property sectors and offers an expansive range of financing solutions to real estate borrowers. Follow us on LinkedIn at www.linkedin.com/showcase/barings-alternative-investments.
Barings is a $391+ billion* global investment manager sourcing differentiated opportunities and building long-term portfolios across public and private fixed income, real estate, and specialist equity markets. With investment professionals based in North America, Europe and Asia Pacific, the firm, a subsidiary of MassMutual, aims to serve its clients, communities and employees, and is committed to sustainable practices and responsible investment.
*Assets under management as of December 31, 2021
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