LONDON–Institutional real estate investors have taken note of the retail sector's woes and by the end of 2017 only 13% of those surveyed by Preqin indicated that they thought retail assets were the best opportunity in the current market. Despite that, private equity real estate investors have continued to buy retail assets, according to Preqin. Here's one theory why.

But first some stats. As numbers from Preqin show, investor activity in retail has remained robust. Total deal value for retail assets was $38 billion in 2016 and $43 billion in 2017. Fundraising for vehicles that include retail has also stayed steady and in 2017 these funds raised $42 billion — the highest total since 2008. Year to date 2018 has already seen funds raise $19 billion, Preqin said. “In fact a third of funds closed in each year since 2013 includes some retail property within its mandate, indicating the abiding appeal these investments have within the industry.”

That said, Preqin also noted that despite the strong activity, retail assets represent a shrinking share of the overall deals market, down from 19% of the number of deals announced in 2013 to 14% year to date in 2018.