Asia-Based Investors with a Preference for Core Real Estate Vehicles – September 2014

by Jaren Loke

  • 29 Sep 2014
  • RE

According to Preqin’s Real Estate Online service, there has been a considerable increase (27%) in the number of investors located in Asia with an interest in core vehicles compared to October 2013. Preqin currently tracks 99 Asia-based institutional investors that are active or are considering investments in core real estate funds, constituting a noteworthy 61% of Asia-based institutions interested in unlisted real estate vehicles. Collectively, these investors manage over $7.9tn in assets under management, and have an average current allocation of 7.5% to real estate. 

In terms of geography, South Korea and Japan are the most prominent regions for Asia-based investors, accounting for 27% and 26% of investors respectively. China- and Singapore-based institutions each make up 11% of investors, with the remaining investors located in India (10%), Hong Kong (4%), Malaysia (4%), Thailand (3%), Taiwan (2%) and Kazakhstan (1%). 

Pension funds form the highest proportion (20%) of Asia-based institutions with an interest in core funds followed closely behind by insurance companies, which represent 19% of the investor pool. Banks (13%), asset managers (12%) and wealth managers (9%) make up the remainder of Asia-based institutions with a preference for core vehicles. 

The chart above compares the fund geographic preferences of Asia-based core real estate fund investors in September 2014 against October 2013. Interestingly, it seems that Asia-based core real estate fund investors are increasingly drawn to domestic investments: an overwhelming 90% of the investor pool have a preference for Asia, compared to 50% a year ago. The proportion of investors that favour North America-focused funds has increased from 47% to 53%, while appetite for Europe-focused core vehicles has increased from 41% to 49%, demonstrating the increasingly global outlook possessed by Asia-based investors.

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