After nearly a decade of investing in individual markets including mainland China, Hong Kong, Singapore and South Korea, Brookfield Asset Management is ready to scale up its bets on the Asia Pacific region, according to a senior executive with the Canadian investment giant.
“We’ve really already built a base of the business,” Andrew Burych, managing partner and head of East Asia real estate at Brookfield, said in an interview at the Mingtiandi Singapore Forum on Tuesday. “We’ve established ourselves here on a smaller scale, and now we feel like we’ve got the team in place to really grow the business pretty significantly.”
Burych, who arrived in the city-state one year ago to lead Brookfield’s investment and portfolio management in the region, provided an insider’s perspective on the Canadian giant’s growth strategy for APAC, including lessons from the Toronto-based fund manager’s successful office platform in India, the red-hot Korean property market and Southeast Asian opportunities.
Before a packed house of industry leaders at the all-day event, which was sponsored by Yardi, Burych explained how his posting in Singapore is part of a broader reorganisation at Brookfield, which entered Asia Pacific’s real estate space in 2007 with the $3.6 billion acquisition of Australian construction giant Multiplex.
Wrapped Up With a Bow
With more than $925 billion in assets under management, Brookfield considers development of real estate platforms part of its core expertise. In Asia, the asset manager’s $4.3 billion Brookfield India REIT has amassed 10 high-grade office assets spanning 28.8 million square feet (2.7 million square metres) across key markets of the world’s most populous country.
Brookfield’s Andrew Burych (right) with Mingtiandi founder Michael Cole
“The reason we like building platforms, whether they’re platforms that Brookfield owns or within one of our funds, is we feel like it gives us full control of operations,” Burych said. “We can pull all the levers, we make all the decisions.”
The company also developed Student Roost, a UK student housing platform, which Brookfield sold to a joint venture of Singapore sovereign fund GIC and US developer Greystar in December 2022 for a reported £3.3 billion (now $4.3 billion).
“I think we started with 5,000 beds and ended up with close to 30,000, and put a big management platform in place and sold it at probably a 10 to 15 percent premium above where asset values would have otherwise traded,” Burych said. “And the investor that purchased that business wanted to continue to deploy capital because the market fundamentals were great.”
Burych pointed out that one of the company’s priorities in developing real estate ventures is to identify a scenario where the platform’s next buyer can continue to invest in the business.
”But in general,” he said, “we’re just trying to create a very simple business in a nice package, a present with a bow that we can sell to someone else.”
Fund Manager’s ‘Secret Sauce’
Burych also pointed to the advantages of Brookfield’s ecosystem of investment strategies as a force multiplier for the fund manager’s global dealmaking.
Andrew Burych of Brookfield in a one-on-one interview with Mingtiandi’s Michael Cole
“It’s really our secret sauce,” he told the audience at Pan Pacific Orchard. “And what it really means is we can draw on our renewables business, our infrastructure business, our private equity business, our real estate business, our credit business, and all of that information, all the data gathered over long periods of time, really informs how we make decisions, how we do business.”
In May, Brookfield announced a US partnership with Microsoft to develop 10.5 gigawatts of renewable energy to help the tech giant meet its sustainability targets while feeding its growing data centre network.
“Data centres need power,” Burych said. “They need water in order to operate efficiently. And that pipeline of data centres is probably larger than the pipeline of power coming in. So that piece is very critical to understanding that sort of supply chain, if you will. And so then the infrastructure business, our infrastructure business, has 140 data centres across the globe.”
Carving Off Conrad
Another strategic stroke was Brookfield’s recent sale of the Conrad hotel at the International Finance Centre complex in Seoul to ARA Asset Management’s Korean unit for $300 million, following an exercise that Burych likened to a bidding war.
“What we saw was, across Asia, there was a real dearth of five-star hotels for sale,” he said. “And so what we ended up doing was we decided to carve off the hotel from the rest of the complex and run a separate sales process for it.”
In Singapore and other Southeast Asian markets, Brookfield is taking what Burych terms a measured and staged approach to real estate investment.
“We’ve seen a lot of people invest into Southeast Asia. We haven’t seen a lot of exits,” he said. “Or a lot of people are pioneering how to do maybe a public exit, how to do portfolio sales. And we’re very eagerly watching what’s happening. We’re going to learn. And that’s going to be part of our process of how we end up investing in Southeast Asia.”
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