PGIM Real Estate saw its volume of Asia Pacific transactions double in 2017, as the real estate investment affiliate of Prudential Financial focused on major markets in Japan, Singapore and Australia to generate over $2 billion in deals.
The company chalked up 17 transactions across Asia Pacific during the year, it said in a statement. Most of the deals involved office, retail and industrial properties, as the firm concentrated on “enhanced-return opportunities in smaller markets and sought to capitalise on limited supply in previously underperforming markets.” The transaction surge was led by deals in major cities in Japan, followed by Singapore and Australia.
Globally, PGIM completed 222 transactions totalling $14 billion in 2017, including property dispositions and investments in real estate equity and debt. By comparison, Blackstone Group — the world’s largest real estate fund manager — reported a total of $44.4 billion in global realisations and capital deployments by its real estate platform last year.
PGIM Ramps Up Activity in Asia
In December, PGIM purchased J Tower, an 18-storey office building with a three-storey annex in Fuchu City west of central Tokyo. The 34,000 square metre property had undergone renovation during 2015 and 2016.
The PGIM team further added to its $69 billion in assets under management later that month by acquiring the 13-storey Toyobo Building in central Osaka, Japan’s second-largest city. The 36,000 square metre property is a multi-tenant office building constructed in 1980 originally as the headquarters of Toyobo, a major Japanese textile maker.
Earlier in May, PGIM Real Estate acquired a food storage and distribution centre at 1 Buroh Lane in Singapore. The 60,000 square metre facility provides five levels of high-specification warehouse space. Completed in early 2016, the property is anchored by a large Singaporean supermarket chain.
Going Non-Traditional in Search of Returns
“We successfully identified attractive income streams and areas of market dislocation to deliver target returns for our clients via growth-driven, value-driven and cyclical opportunities around the world,” commented Eric Adler, CEO of PGIM Real Estate in the statement.
Going forward, the company will look into “supply-constrained markets and non-traditional real estate sectors with structural growth potential,” Adler added. “We will also continue to selectively sell stabilized, non-strategic properties.”
Founded in 1970, PGIM Real Estate has operations in 18 cities across the globe and manages $69 billion in assets worldwide as of the end of September. The firm is part of PGIM, the $1 trillion asset management arm of NYSE-listed Prudential Financial, Inc.