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Asia-Pacific-Focused Private Real Estate Funds in Market – August 2012

by Gayatri Pillai

  • 01 Aug 2012
  • RE

Sixty-three private real estate funds with an investment focus on the Asia-Pacific region are currently in market. These vehicles are seeking to raise an aggregate $23.5bn in capital, with 41% having already held interim closes.

Of the Asia-Pacific-focused private real estate funds on the road, 73% are being raised by managers located in Asia and Australasia, accounting for 69% of the total targeted capital. The majority of these Asia-Pacific-based fund managers are located in India (22%) and Hong Kong (22%), followed by China (15%), Singapore (15%), and Australia (11%), with the remainder (15%) based in Japan, Malaysia and South Korea. Sixteen percent of Asia-Pacific-focused private real estate funds in market are being raised by North America-based GPs, while European fund managers are responsible for the remaining 11%.

Sixty eight percent of Asia-Pacific-focused private real estate funds in market employ opportunistic strategies. Value added and core-plus strategies are the next most common among this fund pool, with 29% and 21% of vehicles targeting these strategies respectively. 14% of these funds utilize debt and distressed strategies, while funds employing core strategies make up 10% of the total.

The largest Asia-Pacific-focused private real estate fund currently in market is Fortress Japan Opportunity Fund II. The debt fund is being raised by US-based real estate firm Fortress Investment Group, and is targeting JPY 100bn ($1.26bn) to invest in properties in Japan. Four other notable Asia-Pacific-focused private real estate vehicles are Aetos Capital Asia IV, Alpha Asia Macro Trends Fund II, ARA Asia Dragon Fund II, and Secured Capital Real Estate Partners V – each are currently looking to raise $1bn in capital commitments. Singapore-based Alpha Asia Macro Trends Fund II employs core-plus and value-added strategies, while Aetos Capital Asia IV utilizes debt, distressed and opportunistic strategies to invest in properties in China, Japan and South Korea. ARA Asia Dragon Fund II, raised by Singapore-based ARA Asset Management, is an opportunistic vehicle targeting office, residential and retail properties across Asia. Cayman Islands-domiciled Secured Capital Real Estate Partners V employs debt, distressed and opportunistic strategies to invest in properties in Asia and Australasia.

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