Asia-focused private equity real estate fundraising

by Clare Bowden

  • 24 Sep 2010
  • RE

2010 to date has seen an increase in the amount of capital raised by Asia-focused private equity real estate funds compared to 2009. 16 funds have closed so far this year raising an aggregate $13.2 billion, while in 2009, 22 funds raised an aggregate $10 billion. The largest fund to close in 2010 to date was Morgan Stanley Real Estate Fund VII, which raised $4.7 billion. The vehicle focuses on investment opportunities that arise from corporate spin-offs, liquidations and sales of real estate-related subsidiaries.

The most successful year for Asian fundraising was 2008, when $53.4 billion was raised by 57 funds. A number of large funds closed during 2008, such as Lone Star Fund VI, which raised $7.5 billion, MGPA Asia Fund III, which raised $3.9 billion, and Lehman Brothers Real Estate Partners III, which raised $3.2 billion. The number of Asia-focused funds that closed during 2006 and 2007 was similar to 2008, with 55 and 56 funds closing in these years respectively. However, the amount of capital raised was significantly lower with $34 billion raised in 2007 and $25 billion raised in 2006.

There are currently 56 Asia-focused real estate funds in market seeking to raise an aggregate $28 billion. The largest is PS Fund IV – Asia Fund Select, which is targeting $1.2 billion. The fund is structured as a modular, semi open-ended real estate fund scheme. It consists of a Pan-Asian basket, which comprises four Regional Funds grouped geographically in North Asia, Southeast Asia, Greater China and India. Other notable Asia-focused funds on the road include Forum Asian Realty Income III and Tokyo Office Property, which are both seeking to raise $1 billion.

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