Asia-Based Private Real Estate Fund Managers – March 2013

by Gayatri Pillai

  • 27 Mar 2013
  • RE

Preqin’s Real Estate Online database currently tracks 157 private real estate fund managers that are headquartered in Asia. India-based fund managers represent 25% of this group, while real estate firms located in Hong Kong and Singapore account for 18% and 17% respectively. China and Japan are each home to a further 15% of Asia-based fund managers each, with the remaining 10% of firms domiciled in South Korea, Thailand, Vietnam, Cambodia and Malaysia. Collectively, Asia-based real estate firms have raised more than $55bn in capital over the last 10 years, and have over $14bn available in dry powder.

Asia-based private real estate fund managers appear to have a relatively high risk appetite, with 76% and 39% of these firms employing opportunistic and value added fund strategies respectively. Comparatively, only 22% and 20% of Asia-based real estate firms target lower-risk core and core-plus opportunities respectively. Nineteen percent of Asia-based private real estate fund managers are looking to invest in distressed real estate, and 15% utilize debt strategies. Funds of funds are the least commonly used strategy among Asia-based private real estate firms, with only 2% of these fund managers favouring this strategy.

An overwhelming majority of Asia-based private real estate fund managers prefer to invest close to home, with 97% choosing to invest within Asia. Within Asia, Greater China is the most common investment destination, with 41% of Asia-based real estate firms looking to allocate capital to this region. India is the next most preferred investment location in Asia with 33% of Asia-based real estate firms including the country in their investment focus, followed by Japan (22%), ASEAN (18%), Hong Kong (14%) and South Korea (14%). Outside Asia, 7% of Asia-based private real estate fund managers target property investments in Australia, 6% are interested in the European property market, while only 3% are looking to invest in the US.

There are currently 30 private real estate funds on the road being managed by Asia-based real estate firms. These vehicles are seeking to raise an aggregate of $8.7bn in capital, with 47% having already held interim closes. One significant example is Secured Capital Real Estate Partners V which is targeting $1bn in capital commitments. Managed by Secured Capital Japan, the fund plans to employ opportunistic, debt and distressed strategies to target diversified property assets in China, Hong Kong, Japan, South Korea and Australia. 

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