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The Great Wave of Fund Expiration

Asia Pacific Major Report | October 2014

Prior to the Global Financial Crisis (GFC) Asian Pacific experienced a boom of real estate fund formation driven by a heady mix of liquidity, capital market fundamentals and risk/return parameters.

CBRE data shows​ that around US$91 billion of capital was raised by 184 private real estate funds in the region between 2005 and 2008. Most funds in Asia Pacific were closed-end funds which comprise of a fixed life span. Based on the typical fund life of eight years, CBRE believes that approximately 84 funds are planned to terminate between 2013 and 2016. Peak period of expiry will be in 2015 and 2016, when approximately 50 funds with a gross asset value of about US$40 billion will expire. According to historical disposition levels since 2007, CBRE forecasts that the market will only be able to absorb around 75% of the liquidity created by closed-end funds scheduled to expire in 2015 and 2016. This paper will address the implications for fund managers under such scenario including how they position themselves in the current moment and discuss options they should consider beyond termination.​​


Contacts


Henry Chin, Ph.D.
Head of Research, Asia Pacific
+852 2820 8160
Email

​​  Ada Choi, CFA
Head of Capital Markets
Research, Asia Pacific
+852 2820 2871
Email
  Karie Kwan
Operations Manager, Asia Pacific
+852 2820 2800
Email
         
Leo Chung, CFA
Senior Analyst, Asia Pacific
+852 2820 1527
Email
  Nick Crockett
Executive Director, Asia Pacific
+65 6229 1136
Email
  Junichiro Muto
Senior Director, Asia Pacific
+81 352889519
Email
         
Canon Yau
Director, Asia Pacific
+852 2820 6597
Email
  Sharon Law, CFA
Director, Asia Pacific
+852 2820 6559
Email
   
         

Infographic




APAC Funds Series: 2014 The Great Wave of Fund Expiration

APAC Funds Series: 2016 Fund Termination Extended