CBRE GI Aims $1B at Asia’s Logistics Sector After Latest Fund Close

CBRE Global Investors will be adding more Asian properties to its $98.3 billion in global assets under management, as the Los Angeles-based firm has announced the final closing of a $1 billion Asia real estate fund.

Warehouse-focussed vehicle Asia Value Partners IV aims to create core logistics assets in the region through value-add investments and de-risked development, according to an announcement by the firm. The fund will also target selective investments in other opportunities and sectors that offer attractive returns or where it can identify underpriced assets.

The private equity real estate affiliate of NYSE-listed property brokerage CBRE Group, said the capital haul came from 21 institutional investors in the Americas, Asia Pacific and EMEA. The firm expects the fund and its co-investment vehicles to wield over $2.5 billion in total purchasing power including leverage.

The vehicle, which is now closed to new investors, has acquired or committed to $1.1 billion of property investments through five deals to date, mainly logistics assets in China, Japan and South Korea.

During 2016 CBRE GI teamed with Ivanhoe Cambridge to invest in a $400 million China-focused joint venture with Sydney-based logistics developer Logos. That deal came one year after the two private equity firms had invested an initial $400 million with Logos for its mainland expansion.

Investors Ride the eCommerce Wave

“Forecasts of private consumption growth in Asia Pacific are notably higher than in other major regions,” commented Adrian Baker, CBRE GI’s chief investment officer for Asia Pacific in the statement. “Additionally Asia Pacific e-commerce sales as a percentage of total retail sales are the highest of all major regions and are expected to continue to grow at a faster pace. These factors support the case for investment in modern logistics facilities across the region.”

Online shopping accounts for 14.7 percent of total retail sales in Asia Pacific at $1.37 trillion this year, a figure that is predicted to more than double to $3 trillion by 2021, according to an August report by market research firm eMarketer.

The rapid growth of e-commerce and retail spending in general, especially in China, has generated robust demand for modern warehouse and distribution facilities. Less than five percent of the total logistics stock in China and Japan consists of investment-grade space for lease, according to property consultancy JLL.

CBRE Global Investors Raises Its Profile in APAC

CBRE Global Investors has been active in Asia Pacific since 1995, and currently has $10 billion in assets under management in the region. The firm invests in value-added opportunities across all sectors via its Diversified Pan-Asian Strategies, Strategic Partners Asia, and Japan platforms.

The company also invests in core shopping assets with a focus on supermarkets and hypermarkets through its Asia Pacific Retail Platform, and clinches other deals in the region through its independent division CBRE Global Investment Partners.

The business received a major boost in 2011, when CBRE Group acquired most of the real estate investment management operations of Netherlands-based ING Group in Europe and Asia. ING had a $5.2 billion portfolio in Asia as of the end of 2010.

While a number of investment management heavyweights including Allianz Real Estate, LaSalle Investment Management, and PAG Real Estate have recently announced new funds or fundraising milestones in Asia Pacific, not all global investors are bullish on the region’s property sector. US private equity giant BlackRock has closed its fourth Asia property fund at just over $500 million, half of its $1 billion target, PERE reported this week.

The final close for the opportunistic vehicle, BlackRock Asia Property Fund IV, took place in September. The firm’s previous fund, BlackRock Asia Property Fund III, had raised $3.89 billion.