There are currently 133 institutional investors located in Asia-Pacific that invest in private real estate funds employing core or core-plus strategies. Together, they represent USD 4.2 trillion in total assets, and allocate more than USD 132 billion to real estate investments. On average, these investors have an allocation of 8.8% to the asset class.
Tokio Marine and Nichido Fire Insurance (TMNF) is one of the top 10 largest real estate investors in the Asia-Pacific region. With USD 107 billion in assets under management (AUM), the Japanese insurer only seeks real estate exposure via core and core-plus funds. TMNF is coming out of its temporary halt in real estate investments, and is seeking to make its first commitment in more than a year by H2 2012. It put its real estate investments on-hold in 2010 due to unstable market conditions which continued into 2011. TMNF is going to focus on vehicles investing in developed economies such as Europe and the US. Previously, it included value added, opportunistic and distressed strategies under its consideration, but will no longer do so in order to limit its investment risks going forward. The insurance company looks to commit between USD 10 million and USD 20 million per private real estate fund.
Of the 133 Asia-Pacific-based investors employing core or core-plus strategies, more than half are Australian firms (59%), 11% are South Korean, 11% are Japanese and 6% are based in India. The remaining investors come from countries such as Singapore, China, Thailand, New Zealand and Malaysia. A significant Australian investor is UniSuper, a superannuation scheme for academic and general staff in the higher education and research sectors. It has an allocation of 9.8% to the property asset class out of its AUM of USD 34 billion. UniSuper invests in core funds as such vehicles meet its risk and return criteria. The superannuation scheme also targets a variety of other private real estate funds including value added and opportunistic vehicles. Besides private funds, UniSuper also gains access to the asset class through direct investments and listed funds. Its real estate portfolio is diversified globally; the superannuation scheme has access to properties in Australia and emerging markets.
Government of Singapore Investment Corporation (GIC) is one of Asia-Pacific’s biggest investors in terms of AUM and allocation to real estate. It manages USD 248 billion of Singapore’s reserves, allocating 10% to property investments. GIC’s core and core-plus portfolio includes funds such as ECE European Prime Shopping Center Fund, ProLogis European Properties Fund II and Regency Retail Partners. The sovereign wealth fund is a fairly conservative investor, therefore lower-risk vehicles like core and core-plus funds sit well with its investment strategy. GIC also invests in other strategies and take other routes to market in order to further diversify its portfolio. It invests on a global basis, gaining exposure to office buildings in Australia and the US, logistics facilities in Japan and debt assets in Europe.