PGIM Real Estate completed $3 billion worth of deals in Asia Pacific during 2021, tripling its total from a year earlier in the region, according to a release by the company on Thursday.
“The growth of PGIM Real Estate’s portfolio in Asia Pacific is centred on high-conviction investment themes driven by three pillars of growth: digital transformation, generational change in living needs, and sustainability,” said Benett Theseira, head of Asia Pacific at PGIM Real Estate. “These pillars significantly shape the demand in real estate and create attractive investment opportunities across all investment strategies and all major markets including Singapore, Japan, Mainland China, Hong Kong and Australia.”
The real estate fund management affiliate of US finance giant Prudential achieved its 2021 milestone through a combination of 68 transactions including $2.35 billion in equity deals, plus another $670 million in debt investments.
The trebling of its Asia Pacific transactions was a major contributor to PGIM notching a record $42.7 billion worth of deals globally last year, across 1,067 transactions. That total was up 43 percent from the previous year, and included $34.97 billion across 917 deals in the US and $4.7 billion from 76 transactions in Europe.
Staying Busy in APAC
In APAC’s booming logistics sector, PGIM completed $721 million worth of acquisitions last year. The fund manager’s Asian core strategy gained exposure to logistics assets spanning 286,704 square metres (over 3 million square feet) across Seoul, Sydney and Melbourne.
An additional 230,000 square metres of logistics assets were acquired in China and Seoul for the firm’s core-plus and value-add strategies. PGIM in June announced the acquisition from New Ease of a 10-warehouse complex in Nanjing on behalf of its core-plus strategy and warehouse projects in Shanghai and Langfang under its value-add strategy, in deals totalling $323 million.
PGIM also dove into digital infrastructure by forming a $575 million joint venture with US giant Equinix to develop and operate data centres in Sydney. The partners will build two hyperscale data centres under the Silicon Valley firm’s xScale brand with a combined power capacity of 55 megawatts of power capacity once completed.
In the multifamily sector, PGIM continued its long practice of investing in rental residential properties in Japan. In November, PGIM’s AP Residence One GK joint fund with Alyssa Partners acquired a newly built 11-storey apartment building in Mukojima, northeast Tokyo, to add to the platform’s JPY 9.2 billion ($81 million) seed portfolio established in January 2021.
New Year, New Strategies
PGIM has further diversified its bets in 2021 with a foray into Hong Kong’s burgeoning residential conversion market.
Mingtiandi reported in January that PGIM had moved to acquire the Travelodge Central Hollywood Road in the Sheung Wan area for HK$850 million ($109 million), with Dash Living taking over management of the hotel as a new co-living project.
Around the same time, the property fund manager picked up the Casa Hotel at 487-489 Nathan Road in Kowloon’s Yau Ma Tei area for HK$590 million ($75.7 million) after the owner had shopped the property for as much as HK$800 million before the COVID-19 pandemic struck, according to the Hong Kong Economic Times.
Then just last week, PGIM unveiled a South Korean value-add warehouse investment vehicle with Singapore’s CapitaLand Investment, the joint venture having already acquired the Hansol Cold Storage Centre in Gwangju city for KRW 90.2 billion ($74 million) to seed the strategy.
PGIM Real Estate has $209.3 billion in gross assets under management and administration as the property investment arm of PGIM, the $1.5 trillion global asset management business of Prudential Financial.