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Australasia-Based Investors in Unlisted Real Estate Vehicles - March 2014

by Joyce Chee

  • 12 Mar 2014
  • RE
Australasia is home to a significant proportion of institutional investors in Asia-Pacific; approximately one third of the real estate investor pool hails from Australasia. Australasia also has a large number of superannuation schemes that feature property as an investment strategy. Preqin’s Real Estate Online service currently tracks 114 Australasia-based investors with an interest in private real estate vehicles. Together, these institutional investors manage $1.6tn in total assets, with $62bn allocated to the real estate asset class. Superannuation schemes make up a significant proportion (70%) of the investor pool, while asset managers (11%), government agencies (4%) and insurance companies (4%) form the rest of the top four firm types. So what are the investment preferences of these Australasia-based investors?
 
An overwhelming majority (90%) of investors based in Australasia have a preference for core vehicles. A possible reason for this could be that superannuation schemes, the investor type that accounts for the largest proportion of Australasian investors, offer stable investment options for their members. As such, investing in core funds appeals to these institutions. Opportunistic vehicles (56%) are also highly sought after by Australasia-based institutions, while 48% of the investor pool is inclined towards value added funds. Forty-three percent of these Australasian investors will invest in core-plus vehicles while 23% of them have a preference for debt funds. 
 
In terms of location preference, Australasian institutions have a strong home bias with 91% of investors choosing to invest in the Australasia region. Forty-two percent of the investor pool has a global outlook while 38% of institutions will seek opportunities in Europe. Asia-focused funds appeal to 34% of these investors while 32% have an interest in North American vehicles. 
 
Sixty percent of investors based in Australasia are not open to investing in first-time funds. Twenty percent of institutions will invest with managers raising funds for the first time, while an equal percentage is willing to consider such vehicles. Separate account mandates appeal greatly to Australasia-based investors; a noteworthy 81% of the investor pool welcomes such opportunities. 
 Australasia is home to a significant proportion of institutional investors in Asia-Pacific; approximately one third of the real estate investor pool hails from Australasia. Australasia also has a large number of superannuation schemes that feature property as an investment strategy. Preqin’s Real Estate Online service currently tracks 114 Australasia-based investors with an interest in private real estate vehicles. Together, these institutional investors manage $1.6tn in total assets, with $62bn allocated to the real estate asset class. Superannuation schemes make up a significant proportion (70%) of the investor pool, while asset managers (11%), government agencies (4%) and insurance companies (4%) form the rest of the top four firm types. So what are the investment preferences of these Australasia-based investors?

An overwhelming majority (90%) of investors based in Australasia have a preference for core vehicles. A possible reason for this could be that superannuation schemes, the investor type that accounts for the largest proportion of Australasian investors, offer stable investment options for their members. As such, investing in core funds appeals to these institutions. Opportunistic vehicles (56%) are also highly sought after by Australasia-based institutions, while 48% of the investor pool is inclined towards value added funds. Forty-three percent of these Australasian investors will invest in core-plus vehicles while 23% of them have a preference for debt funds.

In terms of location preference, Australasian institutions have a strong home bias with 91% of investors choosing to invest in the Australasia region. Forty-two percent of the investor pool has a global outlook while 38% of institutions will seek opportunities in Europe. Asia-focused funds appeal to 34% of these investors while 32% have an interest in North American vehicles.

Sixty percent of investors based in Australasia are not open to investing in first-time funds. Twenty percent of institutions will invest with managers raising funds for the first time, while an equal percentage is willing to consider such vehicles. Separate account mandates appeal greatly to Australasia-based investors; a noteworthy 81% of the investor pool welcomes such opportunities. 

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