Franklin Templeton closes $383 million real estate fund

Franklin Templeton Real Estate Advisors relocates Wenning Jung to Singapore and Donna Ming-Yuan Lee to Hong Kong to support the new fund.

Franklin Templeton Real Estate Advisors has closed its Franklin Templeton Asian Real Estate Fund with total commitments of $383 million. The fund's investors include institutions in the UK, Finland, Germany and Australia.

Franklin Templeton Asian Real Estate Fund is a sub-fund of the Luxembourg specialised Franklin Templeton Real Estate Funds, which is a private closed-end portfolio that invests with selected private real estate funds across Asia, but does not invest in listed property securities or direct property.

The latest fund's portfolio managers are Glenn Uren and Jack Foster, both of whom are based in New York. Foster is head of real estate at Franklin Templeton Real Estate Advisors. They are supported by Wenning Jung, who was recently relocated to Singapore from California, as well as a team of 11 additional private real estate investment professionals globally.

"Recent turmoil in the global markets and reduced access to financing have been creating unique investment opportunities in both the developed and emerging Asian property markets," says Uren. "Savvy investors are cautiously exploring the region looking for undervalued and distressed assets. It's a unique investment climate in which to deploy capital. We believe that 2009 and 2010 should provide excellent opportunities for real estate investing in Asia."

Uren says the fund offers opportunities for diversification and the potential for risk-adjusted real estate returns by seeking to identify managers in various sectors and countries across Asia that can take advantage of inefficiencies in their local property markets.

Franklin Templeton Real Estate Advisors has been investing in global real estate since 1984. The team invests in and manages indirect real estate portfolios of public and private investments, seeking to offer an efficient alternative for investing in global property.

Jung is one of two key executives at Franklin Templeton Real Estate Advisors in Asia. She is continuing her coverage of Asian private real estate fund investments in Singapore while providing the team with on-the-ground, local real estate market expertise. She joined Franklin Templeton in 2007 from the California Public Employee Retirement System (CalPERS).

Donna Ming-Yuan Lee, meanwhile, is a research analyst who relocated from New York to Hong Kong, where she is continuing her coverage of listed Asian real estate investments.

Foster oversees the Asian operations of Franklin Templeton Real Estate Advisors form New York.

Franklin Templeton Real Estate Advisors notes that many Asian countries avoided the complex financial engineering that has created problems for some real estate managers throughout the United States and Europe. As a result, the company believes most Asian economies and real estate investment markets should be well-positioned to provide attractive long-term real estate opportunities to investors as they undergo significant economic change and move towards economic expansion.

Globalisation and improvements in technology have been driving companies to relocate industrial production, particularly to Asia, to take advantage of lower costs and flexible workforces. This, along with the strong development of intra-Asian trade and growing foreign direct investment, has led to substantial growth in many Asian markets which has given rise to significant opportunities for real estate investors, the company says.

Economic growth continues to be projected in Asia, at relatively stronger rates than in the United States and Europe.

Meanwhile, the effect of changing demographics in Asia, Europe and the Americas has generated investment opportunities for all types of real estate. In the housing markets in Asia and Latin America, young populations and wealth accumulation have shaped the number of households formed and the type of housing selected, resulting in strong demand for housing. Similarly, in retail markets, a change in wage rates is affecting the quantity of products purchased. In Japan, the United States and certain European markets, the aging population may impact the demand for housing.

Including the latest fund, Franklin Templeton Real Estate Advisors now has five funds that are closed to new investors, including:

  • Franklin International Real Estate Fund closed in December 2003 after raising total commitments of $92 million from institutional investors; it was the first multi-manager product to invest in the global private real estate market offered to Australian investors;
  • Franklin International Real Estate Fund 2 closed in June 2006, raising a total of $398 million from Australian institutions;
  • Franklin Templeton European Real Estate Fund of Funds closed in October 2006 with total commitments of €209.5 million; and
  • Franklin Templeton Asian Real Estate Fund closed in November 2008, raising total commitments of $383 million from European and Australian investors.
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