Tishman Speyer, Raffles Family Office Launch APAC Real Estate Fund

Tishman Speyer has teamed up with Hong Kong-based Raffles Family Office to launch an opportunistic Asia Pacific fund for ultra high net worth individuals (UHNWIs) focusing on investments in “new economy” real estate.

Dubbed the Tishman Speyer/Raffles Family Office APAC Opportunity Fund I, the vehicle plans to invest in value-add and opportunistic properties across the region with a focus on the living and logistics sectors, while also targeting credit strategies and distressed opportunities, according to a joint announcement on Wednesday.

“This marks a milestone in Tishman Speyer’s expansion into Asia Pacific gateway cities, and the start of a significant partnership with Raffles Family Office and their investors,” Rob Speyer, chief executive officer (CEO) for Tishman Speyer said in a statement. “Tishman Speyer and RFO will create a compelling portfolio that supports the growth of new economy sectors throughout APAC.”

Established to provide wealthy private individuals with access to institutional grade property investments, Tishman Speyer and Raffles Family Office are launching the fund as rising inflation has motivated more than half of APAC family offices to increase their investments in real estate this year, according to a report jointly published by Raffles and Campden Wealth late last year.

Capitalizing on Downturns

While the partners did not disclose the target size of the vehicle, Raffles Family Office managing partner for real estate Joe Kwan told Mingtiandi on Wednesday that the APAC fund will be focused on gateway cities in established markets such as Australia, Singapore, Hong Kong, Japan and South Korea.

Kwan described the vehicle as “the first of its kind” to be made available to ultra high-net worth individuals, with the rising cost of debt financing potentially creating attractive acquisition opportunities.

“Partnering with Tishman Speyer will enable the fund to access defensive thematic real estate investments underpinned by longer term secular tailwinds,” he said. “At the same time, the current real estate cycle may see financing-induced pricing dislocation and offer attractive discounted entry opportunities for investments.”

Kwan pointed out that downturns have historically yielded amplified risk-adjusted returns, while he sees Asia Pacific’s robust fundamental underpinning long-term value.

The partners did not provide details of their vision of the new economy asset spectrum, with the term generally used to describe properties which benefit from the rapid growth of the tech sector, including warehouses, data centres, life science facilities and sometimes rental housing.

Growing Team

Tishman Speyer is launching the private wealth management strategy as the firm grows its team in the region.

Just last month the New York-based developer and fund manager hired former AEW executive Adrian Lee as senior director of acquisitions for Asia Pacific last month.

At Tishman Speyer, Lee is reunited with Graham Mackie, who joined the company in June last year to lead its Asia business outside of China and India.

Last October the company brought on board former Gaw Capital executive Jian An Tanto serve as investment director based in Singapore, with Tishman Speyer saying it continues to look for more investment professionals to join its acquisitions team in Japan, South Korea and Australia – all target markets of the new fund.

Known for its Manhattan real estate expertise, Tishman Speyer has also established a number of funds for Asian investors in recent years.

In 2021 the company announced a $500 million global property fund backed by Korea’s Hana Financial Group and during that same year tied up with a pair of Hong Kong investors to acquire a Shanghai commercial site for RMB 5.09 billion (then $800 million).

Inflation Hedge

Half of family offices in the region are relying on real estate as a hedge against inflation as 88 percent consider rising prices for goods and services as the top risks this year, according to the Asia Pacific Family Office Report 2022, which Raffles and Campden Wealth published in November.

The report showed that, while more than three-quarters of family offices already own a property portfolio, direct real estate investment accounted for just 10 percent of the total assets managed by family offices in the region.

Residential properties are the most popular among private investors followed by offices, industrial and retail, the report said, while hospitality and senior housing assets were the least popular.