Asia property funds to top $200 bn in 2-3 years

Asia property funds to top $200 bn in 2-3 years

Hong Kong: Asia’s property fund size will expand by at least 50% in the next two-three years to $200 billion (Rs9.3 trillion), driven by demand from institutional investors from countries including China, industry executives said on Tuesday.

Pension funds, sovereign wealth funds and affluent individuals or so-called high net-worth individuals would likely boost their portfolios for real estate funds in coming years after appetites waned sharply during the sharp economic downturn earlier this year, the executives said.

“The next 12 months will probably be a bit slow because we are still coming out of this difficult global situation, but then I think it will pick up more quickly after that," said Nicholas Loup, Asia-Pacific chief executive of UK-based private property group Grosvenor Ltd.

Asia’s fund managers have $130.9 billion of property assets under management, based on a survey by the Asian Association for Investors in Non-listed Real Estate Vehicles, a non-profit organization focusing on fund-related companies in the region.

The current global property fund totalled $409.6 billion, the association’s first-ever survey showed.

Loup, who is also chairman of the association, said Asia’s fund size could easily top $200 billion over the next few years, barring risks external to the region, such as debt problems faced by financial institutions in markets outside Asia.