New research from Preqin demonstrates that despite an uncertain outlook for many Asian economies, appetite for Asian private real estate has grown among investors based in North America and Europe, as well as Asia.
North America- and Asia-based real estate investors have shown the most significant increase in appetite for Asian investments, with 17% of investors based in North America focusing on Asian investments in February 2014, compared to only 9% in July 2013; similarly 71% of Asia-based investors are targeting the region in the year ahead as of February 2014, compared to 57% in July 2013.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
This appetite has driven growth in fundraising for private real estate funds targeting Asia, with the total capital raised by these vehicles increasing from US$5.4bn raised by funds closed in 2011, to $7.9bn by funds closed in 2012 and US$10.5bn by funds closed in 2013.
- Europe-based investor appetite for Asian private real estate investments has more than doubled over the last year, from 18% of European investors targeting these investments in February 2013 to 41% in February 2014.
- 22% of Asia-focused private real estate funds closed in 2012 or 2013 raised 125% or more of their target size, and no funds closed in 2010 to 2011 achieved this.
- 51 Asia-focused private real estate funds are currently seeking capital commitments from investors, targeting a total of US$20.5bn.
- Several large global private real estate firms launched Asia-focused funds in 2013, including Blackstone Real Estate Partners Asia, managed by Blackstone Group, which is targeting US$4bn in investor commitments and is the largest Asia-focused private real estate fund currently in market.
- Following Blackstone Real Estate Partners Asia, Aetos Capital Asia V, managed by Aetos Capital Real Estate and targeting US$1bn, Invesco Real Estate’s Invesco Asia Real Estate Fund III, targeting $800mn, and Red Fort Capital’s Red Fort India Real Estate Fund III, targeting US$800mn, are the next largest Asia-focused private real estate funds in market.
- The vast majority of the 51 Asia-focused private real estate funds in market are focusing on opportunistic or value added opportunities – there are 31 opportunistic funds targeting US$15.6bn and 10 value added funds targeting US$3.2bn.
- Opportunistic funds are the most sought after fund type by investors targeting Asian private real estate investments, with 66% of investors targeting this strategy.
- 58% of investors surveyed by Preqin stated that geographic diversification was the main reason they invest in Asia-focused real estate firms; 42% named the returns potential of these vehicles.
Andrew Moylan, head of Real Assets Products, Preqin said: "Renewed appetite for Asian real estate exposure from institutional investors across the world has driven the growth in fundraising seen in the region in the past year. Some of the biggest players in private equity real estate are marketing funds targeting the region, including Blackstone Group, Invesco Real Estate and Carlyle Group, reflecting the attractive opportunities these firms believe there are in Asia and the growing investor appetite for the region. Preqin’s conversations with investors across the globe show that the potential for portfolio diversification and strong returns make Asian real estate attractive to many institutional investors, and their appetite is clearly on the rise. This is likely to lead to further fundraising growth in 2014, as managers look to take advantage of the opportunities and investor interest in Asia."
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
