The Top 50 Asia-Pacific Institutional Investors in Private Real Estate Funds by AuM

by Ee Fai Kam

  • 25 Apr 2012
  • RE

The top 50 Asia-Pacific-based investors in private real estate funds by assets under management (AUM) hold USD 6.1 trillion of the world’s capital. Of this, at least USD 130 billion is invested in the real estate asset class, with more than USD 10.2 billion committed to private funds alone. Although there are a total of 41 countries in the Asia-Pacific region, institutional appetite for private real estate funds comes only from nine nations. Australian institutions make up the largest proportion of these investors (28%), the Japanese rank second (24%) while South Korean (18%) and Indian (10%) institutions come in third and fourth respectively. The rest of the 50 investors come from Singapore, Thailand, China, Hong Kong and Malaysia. This reflects the relative sophistication in the financial markets of these nine economies compared to the rest of emerging Asia Pacific.

Of the 50 Asia-Pacific real estate investors with the highest AUM, 13 are banks and 10 are insurance firms, while the rest include sovereign wealth funds, asset managers, superannuation schemes, pension funds and corporate investors.

The core strategy is the most popular fund type for investors on the top 50 list, with 68% of institutions investing through such vehicles. As a lower-risk fund type that has the potential to generate regular rental income, core private real estate vehicles are attractive to Asia Pacific investors looking for investments with long-term horizons. 65% prefer opportunistic funds, 50% invest in value added opportunities and 40% commit to core-plus vehicles. Debt type private equity real estate funds garner the support of 33% of investors, while the distressed strategy is chosen by 28% of the top 50 Asia-Pacific institutions. Funds of funds and secondaries real estate funds are unpopular in Asia-Pacific, with only 3% willing to commit to such strategies.

In terms of geography, private real estate investors in Asia-Pacific see Asia as the top investment destination, with 62% having an exposure to the region. This comes as no surprise, given the proximity and local knowledge of Asia-Pacific investors. Within Asia, the Far East region garners 14% of investor support, ASEAN draws 12%, while South Asia attracts 7%. With the majority of investors based in Australia, 45% prefer to invest in Australasia. 43% direct capital to North America, 40% commit to European funds while 33% have a diversified global outlook.

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