If you want to raise money for a new real estate fund, get on a plane to Asia. For the first time on record, Asian investors were the largest source of capital for real estate funds globally in 2022.

In a major shift in the centre of gravity for money when it comes to real estate investment, Asian investors put up $94.3B for nonlisted real estate funds, about 35% of the $270B raised, data from INREV, ANREV and NCREIF showed.

North American investors also accounted for about 35% of the total at $93.1B. North America has been the top source of capital annually since data was first collected in 2015.

Asian pension funds and sovereign wealth funds are underallocated to real estate compared to their North American counterparts and are now playing catch-up as they seek to meet asset allocation targets and diversify their portfolios. The survey found Asian investors are still an average 200 basis points below their target allocation to real estate.

North American and European institutions, by contrast, are either selling real estate or finding it difficult to invest more due to the denominator effect. Because the value of their stocks and bonds have fallen quickly in the past year while real estate is slow to revalue, allocations to the sector as a proportion of an investor’s portfolio have risen, bumping against the upper limits allowed by investment committees.

North America remains the geography targeted by the highest amount of capital, with $93B raised for investment in the region, compared with $71B raised for European investment, $70B raised for global investment, and $35B raised for Asian investment.

The amount raised was slightly lower than the $279B raised in 2021, but was still the second best year for capital raising since 2015.