The Canadian pension fund plans to increase its allocation to the region from 10% to 15% over the coming four years, even as its total assets under management rise.
The fund will invest in real estate projects all over Asia. Fritz Nehrig, senior vice-president for fund management at Pacific Star, says the fund has capacity for investment from India to Southeast Asia markets such as Vietnam and Malaysia, to Japan, Korea and China.
Nehrig says the fund is open to institutional investors. European and Middle Eastern investors have expressed the strongest interest, although there is some demand in Asia as well, thanks to Asia's strong underlying economic fundamentals compared to other opportunities available in the US and Europe.
Pacific Star is also structuring the offer through fund of funds and other indirect umbrella investment vehicles. In particular, the fund is targeted at institutions previously unexposed to Asian real estate markets in such a liquid format, without the usual restriction of closed-end commitments.
For the rest of this year through to 2009, Pacific StarÆs weightings for Asia-Pacific real estate markets are as follows:
Overweight: residential, retail and office in Kuala Lumpur; retail and office in Seoul; residential, retail and office in Tokyo; retail and office in Shanghai; retail in Beijing; and residential and retail in Hong Kong.
Neutral with selective acquisitions: Bangkok, Singapore, Jakarta retail, Shanghai residential, Beijing residential, Beijing office, Hong Kong office.
Underweight with opportunistic purchases: Jakarta office, Seoul residential.
In its latest 2009 outlook, the real estate house has added a word of caution for investors û excess liquidity, rather than capital shortage, might continue to plague Asian markets over the longer term.
They have teamed up with each other and with overseas investors to boost investment capacity in real estate and infrastructure investments in Europe and North America.
Asset owners across Asia Pacific weathered some difficult market conditions in 2020. While most emerged from the year successfully, some notable exceptions suffered asset drops.
Thanks to the current rise in yields, the key return driver of the bond market is set to change but its bull run will very likely continue.
Asian institutional investors were generally more optimistic about post-pandemic economic recovery but only 33% were confident about achieving their short-term objectives.