CBRE IM Closes Sixth APAC Value-Add Fund with $1.74B in Commitments

Just one year and seven months after closing on $900 million for its fifth Asia Pacific value-add fund, the company formerly known as CBRE Global Investors has nearly doubled that financing achievement as it wraps up the sixth edition of the logistics-focused strategy.

Now known as CBRE Investment Management, the private fund division of CBRE has received total capital commitments of $1.74 billion for the Asia Value Partners VI fund, which will pursue build- and reposition-to-core opportunities in the most developed and liquid markets of Asia Pacific.

“We are honoured by the continued support from our existing partners as well as new clients who have shown confidence in our team even when due diligence was limited to virtual formats amid international travel restrictions,” said Bernie McNamara, global head of investor solutions at CBRE IM.

The total amount exceeds the initial target of $1.2 billion for the fund and, excluding co-investments, represents a hard cap, CBRE IM said Tuesday in a press release. AVP VI just held its first closing in June and has now closed its doors to external investors.

80% Allocation to Warehouses

CBRE IM did not identify specific partners in AVP VI, saying only that the fund received strong interest from a diverse group of institutional investors. Backers of previous funds in the series have included sovereign wealth funds, pension funds (including the State Board of Administration of Florida) and other institutions across North America, Europe and the Middle East.

AVP VI’s swift fundraising underscores the continued need for high-quality warehouse assets in clients’ global portfolios, said CBRE IM, which took on its new identity in a rebranding last month. Logistics will be the central focus of the fund’s strategy, with at least 80 percent of equity commitments targeting the segment, although the fund may also selectively invest in other sectors with attractive risk-return profiles.

A 100-person APAC team covering the fund’s target markets has identified a pipeline of opportunities and expects to complete its first investments by the end of the year, CBRE IM said.

Outraising Fund Five

Last year, CBRE IM closed its Asia Value Partners V at a hard cap of $900 million, or about 10 percent less than what it achieved for the fourth iteration of the strategy. AVP V was expected to have total purchasing power of $2.3 billion after leverage.

The latest fund is in line for purchasing power exceeding $4 billion, including leverage, for deployment over a 36-month investment period.

Since 2016, CBRE IM has invested in 57 logistics assets in Asia Pacific with a combined asset value of $6.7 billion and a total area of 4.1 million square metres (over 44.1 million square feet).

The firm currently has $15.1 billion in assets under management across APAC in core, value-add and opportunistic private real estate, including listed real assets and infrastructure, with that amount encompassing both pooled funds and separate accounts.

Sheds Still a Draw

As CBRE IM celebrates its latest milestone, rival fund managers have been pursuing their own logistics-powered value-add strategies in the region.

Last month, US-based AEW announced the final closing of its Value Investors Asia IV fund with commitments totalling $1.54 billion, exceeding its original target of $1.2 billion by more than 22 percent less than two years after launch.

“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,” senior portfolio manager and Asia Pacific CIO Jason Lee said at the time. “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.”

In January, PGIM Real Estate neared the $1 billion close of its AVP IV value-add fund, prioritising logistics investment in Singapore, Japan, Australia and especially China.

“We see logistics as interesting because of the strong trade activity from both exports and intra-regionally, and of course very strong e-commerce growth,” APAC head Benett Theseira told Mingtiandi then.