The demand for property assets in Asia-Pacific has been significant in the past five years. Emerging markets, which include China and India, experienced strong growth rates and have therefore fuelled substantial demand for assets across the property sector. Coupled with investors’ renewed interest in sector specific funds and an increase in the number of cash-strapped developers in the region, Asia-Pacific-focused funds have successfully raised a total of $75bn between 2008 and December 2013. So what types of property are Asia-Pacific-focused funds that closed in the last five years investing in, and what is the location breakdown for these vehicles?
Of the 213 private funds that closed in the last five years, a noteworthy 53% of these vehicles target residential assets. Office buildings (41%) remain relatively favorable while 39% of vehicles have an interest in diversified property. Thirty-eight percent of private funds are interested in the retail sector while 30% target industrial assets.
It is interesting to note that of the 213 funds that closed in the past five years, 79% of these vehicles are country-specific, suggesting that investors prefer such funds as opposed to pan-Asian offerings. In terms of location breakdown, funds with a preference for China make up the highest proportion (38%) of these vehicles. Funds investing in Japan account for 25% of vehicles which achieved a final close in the last five years. Twenty-four percent of private funds include India as an investment destination while 17% invest in South Korea. Funds with an allocation to Australia (12%) make up the top five country preference for vehicles which completed fundraising between 2008 and December 2013.