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Asia-Focused Private Real Estate Funds on the Road – January 2013

by Gayatri Pillai

  • 16 Jan 2013
  • RE

As 2013 gets underway and private real estate fund investors begin to think about where to invest their capital, we take a look at the Asia-focused opportunities available to these investors.

Preqin's Real Estate Online database currently tracks 56 private real estate funds in market that have a primary investment focus on Asia. These vehicles have an average target fund size of $350mn, and are collectively looking to raise over $18bn in capital commitments. Thirty-six percent of the funds in this pool have already held interim closes.

Sixty-eight percent of Asia-focused private real estate funds in market are being raised by managers headquartered in the region, accounting for 57% of the total targeted capital. Of these Asia-based fund managers, the largest proportion (32%) is located in India, followed by Hong Kong (21%), China (18%) and Singapore (13%), Japan (10%), and Malaysia (5%). US-based fund managers are responsible for approximately 20% of the Asia-focused private real estate fundraising activity by number, with the remaining 12% of funds being raised by GPs based in Australia, UK, France, Germany, Mauritius and the Netherlands.

Investors looking to commit to opportunistic real estate funds in 2013 have the largest pool to choose from, with 73% of Asia-focused private real estate funds in market employing this strategy. Investors who prefer value added funds have a smaller range of opportunities however, with only 27% of funds on the road targeting this strategy. Sixteen percent of Asia-focused private real estate funds in market employ debt and distressed strategies, while core-plus and core strategies are the least common, with 15% and 9% of funds utilizing these strategies respectively.

China appears to be the most attractive investment destination among Asia-focused private real estate funds in market in 2013, with 43% of vehicles planning to invest in the region. Japan and India are the next most popular, with 34% and 32% of funds on the road focusing on these countries respectively. The two largest Asia-focused private real estate funds currently on the road, Aetos Capital Asia V and Secured Capital Real Estate Partners V (both targeting $1bn in capital), include China and Japan within their investment focus. The former, raised by US-based fund manager Aetos Capital Asia, is looking to employ debt, distressed and opportunistic strategies to invest in diversified property types in these two countries. Secured Capital Real Estate Partners V has a similar investment strategy but with a broader regional geographic focus that also includes Australia, Hong Kong and South Korea.

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