AEW Announces Final Closing of Fourth APAC Value-Add Fund at $1.54B

Global real estate fund manager AEW announced the final closing of its fourth Asia Pacific value-add fund this week with commitments totalling $1.54 billion, which exceeded its original target of $1.2 billion by more than 22 percent less than two years after launch.

Since its formal debut in December 2019, the VIA IV fund has gained 18 limited partners, including investors that committed to VIA III, its predecessor fund that closed at $1.12 billion in 2018, the company said in a press release.

“VIA IV successfully surpassed the original target of $1.2 billion, with more than 80 percent of the committed capital coming from investors in our predecessor fund, VIA III,” said David Schaefer, AEW’s Asia Pacific CEO.

“This result not only reflects a sustained interest in institutional real estate in Asia Pacific among investors, but also shows confidence in AEW’s execution in implementing a targeted value-add strategy,” Schaefer added.

Sticking With the Strategy

The fund will seek to boost value and drive returns through the repositioning, redevelopment, re-leasing and refurbishment of commercial assets in APAC cities such as Tokyo, Shanghai and Sydney, the company said.

“To date, VIA IV is approximately 30 percent invested with four investments to date, including logistics and mixed-use office assets in Beijing, Melbourne, Seoul and Singapore,” said Jason Lee, Asia Pacific CIO for AEW and senior portfolio manager for VIA IV.

“With a robust pipeline of investments that are under exclusivity already in Tokyo multi-family, Hong Kong industrial office, and Seoul logistics, we expect the fund to be close to 50 percent committed by year end,” Lee said.

Like its predecessor fund, VIA IV will continue to build AEW’s Asia Pacific portfolio by acquiring logistics, multi-family and office assets across the region, the Boston-based firm said.

AEW’s third APAC value-add fund, which closed just over three years ago, drew commitments from insurance firms, as well as US- and Europe-based public and private pensions funds.

Among the investors in VIA III was the Florida State Board of Administration, which added $100 million to VIA III in 2018, marking the US fund manager’s first time investing in the AEW Asia fund series.

The addition to the fund came after a $100 million contribution to the strategy by the California State Teachers’ Retirement System, and another $50 million investment from the Los Angeles County Employees Retirement Association.

Fund IV Already at Work

Since the launch of its fourth fund in 2019, AEW has acquired a number of industrial and multi-family assets in Hong Kong, Singapore, Australia and Japan.

Last month, AEW agreed to invest HK$933 million ($120 million) in a pair of Hong Kong industrial properties owned by Hanison Construction, including acquiring a a 50 percent interest in 18 Lee Chung street in Hong Kong Island’s Chai Wan area for HK$305 million.

Within the same month, the manager sold one of its VIA III properties in Shanghai, the Innov Tower, to mainland real estate investment platform GSUN Fund Management for an undisclosed amount after acquiring it from CapitaLand for $226 million in 2017.

In May, AEW acquired the Macquarie Innovation Centre in Sydney for A$144 million ($105.5 million), at the same time that it bought a pair of Japanese apartment buildings for JPY 5 billion ($45.4 million) as its first multi-family investment in that country.

AEW had started off the year by agreeing in February to purchase Admirax, a seven-storey light industrial building in Singapore, from BlackRock for S$142 million ($107.3 million).

The closing of AEW’s latest APAC fund comes just less than eight months after competitor PGIM edged to a $1 billion final close of its fourth APAC value-add fund in January.