Australia leads Asia Pacific for unlisted property capital

Australia leads Asia Pacific for unlisted property capital

19 April 2019

Australia leads the Asia Pacific region in attracting investment capital into the unlisted property fund sector, reports the AFR.

The finding comes from the latest Capital Raising Survey 2019 compiled by the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) in conjunction with investor organisations in Europe and the US, includes data from 203 fund managers worldwide.

The survey found that in 2018, funds in Australia attracted the largest share of equity, 23.2 per cent, raised for single country funds in Asia Pacific, equating to around $US3 billion.

The global wave of capital chasing property has become a tsunami, with US$193.7 billion raised for real estate investments in 2018.

This is at least US$185.4 billion for non-listed—a new high and 15.7% increase from US$160.2 billion in 2017, the survey revealed.

Of the total raised, more than half – $US101.9 billion—has already been invested, leaving around $US91.8 billion yet to be deployed.

“This surge in capital flow reinforces an ongoing trend in capital raising, with 71.9 per cent of fund managers expecting capital raising activity to continue increasing in the future,” the survey said.

Illustrating the trend, last week Knight Frank revealed investment turnover in the Brisbane CBD office market surpassed $2 billion for only the second time in history over 2018, with record offshore investment contributing to the high.

The only other time investment activity has been higher than $2 billion was in 2013, when $2.46 billion in transactions was recorded.

Asia Pacific investment strategies—from funds and separate accounts to joint ventures and debt—currently amount to $US26.9 billion.

Well-known investment managers in this country running large unlisted funds include AMP Capital, QIC Global Real Estate, Lendlease, Dexus, Charter Hall, Investa and others.

While less open to scrutiny than the activities of listed players, unlisted funds can provide a big picture view on the state of the market.

Of the total investment into Asia Pacific strategies, some $US13.1 billion was dedicated to Asia Pacific non-listed real estate funds. Significantly, almost half the equity raised in single sector allocations was directed into industrial property funds.