Asia Pac Funds Sitting with Capital to deploy8 April 2020
Capital raising by several large investment groups in recent months has placed billions of capital ready to be deployed into real estate markets across the Asia Pacific region, including Australia. The successful capital raising come despite uncertainty caused by the unfolding of the coronavirus pandemic, as investors anticipate the current disruption to bring new opportunities as the year unfold
US-based asset manager Invesco has reached a $505 million first close on its fourth APAC-focused value-add real estate investment vehicle, including a $100m commitment from the Teacher Retirement System of Texas and $30m from Maine Public Employees Retirement System. With appropriate gearing the funds' purchasing power is approx $1.3bn.
The fund will look at opportunities to execute value-add investments in mature projects in Australia and New Zealand, as well as Japan and Korea. While not pursuing commercial development projects, the fund’s managers are understood to continue to favour building logistics facilities, due in part to their short development cycle and attractive yields.
Invesco's predecessor fund has previously invested into debt positions in Australia. In 2016, Capital Management Australia (CMA) introduced Invesco's to an innovative A$150 million senior debt financing structure for the Brisbane Skytower residential project developed by Billbergia Group. After an 18 month investment term, CMA (acting for Billbegia) successfully exited Invesco when it introduced MaxCap Group to fund the balance of the project.
CBRE Global Investors have also raised significant amounts of capital for the Pan Asian markets closing a recent logistics-focused fund – dubbed Asia Value Partners V – with total purchasing power of $2.3 billion after leverage. The fund will allocate approx 20% to Australia and South Korea, 20% to China, but with the bulk of funds destined for Japan. Commitments were secured from sovereign wealth funds, pension funds – including the State Board of Administration of Florida – and other institutional investors from across North America, Europe and the Middle East.
“The logistics sector in Asia Pacific continues to be supported by solid consumption growth and technology adoption within the region, which in turn is generating an increased investment demand for the type of real estate AVP V is creating – high-quality logistics assets completed to high standards and modern specifications,” said Adrian Baker, CBRE GI’s chief executive officer and chief investment officer in Asia Pacific.
ESR are also looking to tap into similar sources of capital as they seek to raise a further $500m to add to the $450m commitment from GIC for its Australia Logistics Partnership Fund. ESR are also looking at M&A opportunities that may emerge from the covid disruptions where capital starved managers may have liquidity issues to contend with.