With an improved fundraising environment and investors lured back to Asia Pacific real estate, CBRE forecasts that approximately US$53 billion of real estate private equity capital will be deployed into this asset class in the region by 2020. According to CBRE, China, Japan and Australia will be the top three recipients of the capital deployed in Asia Pacific within the next three years. Since 2014, Asia Pacific-focused closed-end real estate funds have deployed US$63 billion out of an estimated war chest of US$116 billion. Australia, Japan and China account for nearly 75% of total investment. Bullish investor sentiment is based on CBRE’s latest review of real estate funds’ investment mandates and their portfolio allocations, The Next Wave of Capital Deployment.
This report by CBRE Research identifies the markets and sectors where this capital is destined and sets out the investment strategies likely to be utilised by core, value added and opportunistic funds in Asia Pacific over the next three years. With property yields having compressed to historical lows, and new technology transforming corporate real estate, the lines between investment strategies are increasingly blurred. CBRE Research believes that gaining a thorough understanding of occupier behaviour and requirements will be critical to formulating a successful investment strategy.