US developer Hines has created a flagship fund for the Asia Pacific region, boosted by a $400 million capital commitment from Canadian pension manager Cadillac Fairview.
The fund, called Hines Asia Property Partners, will be a multi-sector, open-ended, diversified vehicle targeting top-tier markets in Japan, Australia, South Korea, Singapore and China (including Hong Kong), Hines announced in a statement released Tuesday.
HAPP aims to invest in logistics, office, living, retail and select niche sectors to build a diversified portfolio targeting core-plus returns and balancing yield and growth. Cadillac Fairview, the real estate investment arm of the Ontario Teachers’ Pension Plan, is the cornerstone investor in the fund, which has an initial investment capacity of about $900 million.
“We are very pleased to partner with such a prominent like-minded institutional investor like Cadillac Fairview to launch our flagship fund in Asia,” said David Steinbach, global chief investment officer at Houston-based Hines. “We look forward to creating value for our current and future investors, project partners and communities through the fund’s investments.”
Steinbach said the firm’s long-established teams in the region have started to identify and secure opportunities emerging post-COVID across Asia Pacific. Hines entered China in 1996 and has since expanded to key markets in India, Japan, South Korea and Singapore.
HAPP will focus on next-generation assets designed for future tenant demand, capitalising on an attractive pricing environment and fundamental market shifts.
Duncan Osborne, executive vice president of investments at Cadillac Fairview, expects the fund’s Asia investments to accelerate growth and diversification benefits to the manager’s portfolio, with potential for long-term outperformance.
“Our relationship with Hines dates back two decades and they have a proven track record as a trusted manager and operator with demonstrated history of successfully executing investments through their local market teams,” Osborne said.
Hines has been strengthening its regional investment team this year, starting with the January hiring of asset management veteran Ng Chiang Ling as chief investment officer for Asia, based in the developer’s Singapore office.
Before joining Hines, Ng worked at the Asian real estate arm of British asset manager M&G, serving as director of acquisitions and later rising to CEO and chief investment officer.
“This is such an exciting time to be beginning my tenure at Hines,” she said as the flagship fund was announced. “The expertise of the team, in addition to the strength and confidence we instil in our investment partners, while leveraging our proprietary research, will enable us to quickly deploy capital and execute key off-market transactions across multiple locations and sectors.”
Hines made its Asian presence felt with a couple of big deals late last year. In November, the firm joined forces with Metropolitan Real Estate Equity Management — then owned by Carlyle Group, now part of BentallGreenOak — to acquire a 33,800 square metre (363,820 square foot) cold storage facility and adjacent development site in southern China’s Guangdong province.
In December, Hines teamed up with South Korea’s National Pension Service on a $1.5 billion joint venture to invest in real estate projects globally. The JV’s build-to-core strategy encompasses residential, office, logistics and mixed-use opportunities.
Founded in 1957, privately-owned Hines has a presence in 240 cities in 27 countries. The firm oversees a portfolio of assets under management valued at $160.9 billion.