This showed a decline of 79% on Q4 2012, when $25bn was raised by the 46 funds which reached a final close, and the lowest level since Q3 2003 when $5bn was raised.
Fundraising was particularly poor in Europe, where just three funds reached a final close, raising an aggregate $756m, $20m less than that raised by the five Asian counterparts to have closed in the period.
The average time a fund spends in market has also increased in the last quarter, from 18.3 months to 18.7 months, more than double the average time spent in market during 2007.
A total of 23 funds abandoned their fundraising effort in Q1 2013, more than the 17 that did so in the previous quarter.
The asset class has struggled to recover following the downturn in the financial crisis, with quarterly fundraising totals generally sitting below half of the levels seen up until Q4 2008.
The outlook remains bleak for the beleaguered asset class, and according to data provider Preqin, 40% of institutional investors still don’t expect to make new investments in real estate funds during 2013.
Andrew Moylan, head of real asset research at Preqin, said: “Many investors are investing with fewer managers, and there is a lot of competition with a large number of funds on the road, which makes closing funds extremely difficult.
“While recent performance is more encouraging, many investors saw significant declines in their real estate portfolios in 2008 and 2009 and of investors we surveyed at the end of 2012, 47% felt the performance of their private real estate fund portfolios had fallen short of expectations.”
