Asia-Based Investors Interested in Core Real Estate Funds – October 2013

by Joyce Chee

  • 09 Oct 2013
  • RE

In Preqin's Investor Outlook: Alternative Assets, H2 2013, it was revealed that Asia-based institutions are more likely to be active on the real estate market compared to their European and North American peers. Of these Asia-based investors, 47% have expressed an interest for core real estate funds. At present, Preqin tracks 78 institutions headquartered in Asia which have an appetite for stable core funds. This investor pool has aggregate assets under management (AUM) in excess of $4.6tn, of which $7.1 billion is currently allocated to private real estate funds.   

South Korea and Japan are home to the highest proportion of Asia-based investors in core funds; 28% of the investor pool is headquartered in South Korea, while 27% are based in Japan. The remaining investors are located in India (12%), Singapore (10%), mainland China (10%), Thailand (4%), Hong Kong (4%), Taiwan (3%) and Malaysia (3%).

Firms which receive a constant inflow of capital make up the majority of institutions in Asia which have an appetite for funds utilizing the core strategy - 24% are insurance companies while 22% are pension plans. With a burgeoning millionaire population in Asia, asset managers, banks and wealth managers collectively form the second largest group (32%) of investors interested in core funds.

In terms of location preference, 50% of Asian firms investing in core real estate vehicles prefer the home continent, while 47% seek opportunities in North America. Forty-one percent are open to funds operating in the European market, which comes as no surprise since distressed assets have formed the focus of investors since the days of the Eurozone crisis. Of the 78 Asia-based investors, 41% do not have a country or region-specific focus and are willing to consider opportunities globally. Regions further afield such as Australasia and the Middle East are less favourable among Asia-based investors; 22% are open to the Australasian market while only 4% have a preference for the Middle East. 

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