Retail apocalypse comes for private real estate

Both the total capital raised and the aggregate deal value in retail-focused private equity real estate declined dramatically in 2019. The aggregate retail PERE deal value in 2019 was $32 billion on 1,221 deals for an average deal value of $26 million. The year saw 126 fewer deals than 2018 and a 21% decline in average deal values. Additionally, investor demand also dried up in 2019. Only 14 funds closed, down from 24 in 2018 and 41 at the peak in 2016. Only $1.7 billion was raised in 2019.

However, as one door closes another opens. The rise of e-commerce, retail's pale horse, has increased demand for greater logistical infrastructure, and PERE was happy to oblige. Logistic-related deals were valued at a total $32.1 billion in 2019 on 207 deals; an average of $155 million. The number of deals wasn't a significant jump from 2018's 189 count, but there was a much more dramatic jump in deal value, which increased $18.1 billion in the year.