There are 138 Greater China-based institutional investors that invest or are considering investing in the real estate asset class, representing just over a fifth of Asia-Pacific-based real estate investors profiled on Preqin’s Real Estate Online – the third largest population of investors in the region. Some of these investors hold substantial funds under management, and subsequently a large proportion (72%) invest in real estate through direct acquisitions of property. In comparison, nearly half invest through private real estate funds.
Private wealth institutions (comprised of wealth managers and family offices) are the most prevalent real estate investors in Greater China, representing just under a quarter of the population. Other notable investors include insurance companies (21%), corporate investors (14%), asset managers (13%) and investment companies (12%).
As shown in the chart above, Greater China-based investors prefer domestic investments; 70% will target private real estate funds focused on Greater China, including 45% of the total population that will solely target their domestic market. Outside Greater China, nearly one-third of investors will target funds with a global investment mandate and funds focused on North America, while just over a fifth will target pan-Asia- and Europe-focused vehicles.
In terms of strategy, Greater China-based investors have a preference for higher risk private real estate funds; 86% of investors target value added and opportunistic private real estate funds, compared with 40% that target core and core-plus funds. Notably, 57% will target real estate debt investments.