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Capital targeting real estate has reached a new record level of $429 bn (€400 bn) in 2015, according to DTZ's latest Great Wall of Money report.

Total available capital grew 5% over the last six months, down from the 15% growth recorded at mid-2014, the research found.

The strongest growth was recorded across the Americas led by the US, which recorded a 12% increase in new capital to $166 bn. Capital targeting Asia Pacific rose 4% to $122 bn. In contrast, EMEA registered a 1% drop in capital to $141 bn.

The drop in capital targeting EMEA reflects the strength of the dollar against the euro in recent months, DTZ said. In euro equivalents capital rose by close to 12%. However, over the last six months currency movements have meant that in dollar terms one euro is worth 12% less, wiping out any gains.

Given much of the capital has been raised locally, currency movements are unlikely to have an impact. Equally, Europe is potentially more attractive for dollar-denominated investors.

As target gearing remains flat, growth in capital is being driven by increased equity. Available equity rose 11% in the Americas to $70 bn with a 5% increase to $55 bn in Asia Pacific. Despite staying flat, EMEA continues to attract the highest amount of equity at $72 bn.

Globally, and across all regions, aggregate gearing remained flat. EMEA continues to see the lowest target gearing. At 49% it was broadly unmoved, underscoring the conservative approach of investors to the region. On the other hand, the Americas continue to see the highest gearing levels at 58%, and 55% across Asia Pacific.

Funds rush to deploy
Over the past year funds have been seeking an early close in order to deploy capital more quickly. Raised capital reached a new record $408 bn, a 13% increase on six months ago and a 34% rise on a year ago. 'We have seen a decline in the level of new raising, though this may underestimate the total as funds continue to see additional closings,' DTZ noted. Recent QE announcements, especially in Europe, could lead to additional inflows.

The bulk of capital raised is by funds targeting multiple property types. Over 70% of funds are targeting more than one property type, although this has shrunk from close to 80%.

Funds targeting a single asset type have grown to 29%. Of those funds targeting a specific type, residential continues to attract the highest share (23%), followed by industrial (19% and retail (18%). A higher proportion (14%) of funds are also targeting other asset classes, underscoring growing interest in
these more niche sectors, where tapping into specialist market knowledge can currently offer an edge.