As it lays the groundwork for a public listing, Singapore’s ARA Asset Management can chalk up another milestone: overtaking CapitaLand to become the biggest fund manager in Asia Pacific real estate by assets under management, according to data compiled by a group of non-profits serving the property investor community.
ARA’s APAC real estate AUM amounted to $66.9 billion in 2020, up more than 11 percent from the $60 billion in place a year earlier. The uptick allowed the Warburg Pincus-backed firm to move past fellow Singaporean giant CapitaLand’s $62.9 billion in terms of assets in the region, as reported in the Fund Manager Survey 2021.
Total real estate AUM in APAC rose to $726.9 billion in 2020 from $608.2 billion the year before, despite the challenges of the COVID-19 pandemic.
The survey by the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV), its European counterpart INREV and Chicago-based fiduciary association NCREIF looked at 154 managers with global real estate AUM of $4.1 trillion at the end of 2020, up from $3.6 billion the year before.
“The fact that real estate AUM not only surged during the coronavirus pandemic, but grew even faster than the year before is an incredibly encouraging sign that appetite for real estate as a diversifier in investor portfolios has not waned,” ANREV research director Amelie Delaunay said in a release.
ANREV said the report’s findings reaffirmed that Asia Pacific continues to attract a healthy and growing share of global real estate AUM, reflecting confidence in the long-term outlook of the region’s property markets despite the impact of COVID-19.
ARA had grown its assets in Asia Pacific last year through a range of deals, including its acquisition of Sydney-based logistics platform Logos early in the year and an ongoing bid for a hostile takeover of Australia’s Cromwell Property Group.
And despite the swap at the top in APAC, the news wasn’t all bad for CapitaLand. Delaunay noted that the Temasek Holdings-backed group cracked the global top 10 for the first time, with its real estate AUM worldwide exceeding $100 billion. ARA’s global figure was $88 billion.
In 2020, CapitaLand had diversified its portfolio geographically by adding assets in North America and Europe, including buying a UK business park for $168 million in February and signing up for a $300 million multi-family residential joint venture in Texas in December.
US-based Blackstone easily topped the global league table with $319.4 billion in total real estate AUM, up from $278.7 billion in 2019. Rounding out 2020’s global top five were Brookfield Asset Management ($211.4 billion), Prologis ($148.3 billion), PGIM ($145.6 billion) and Nuveen ($132.9 billion).
In terms of real estate assets under management in the Asia Pacific region, ARA and CapitaLand were trailed by fellow Singaporean firm GLP with $42.3 billion and three others with amounts exceeding $30 billion: Charter Hall, Mapletree Investments and Goodman. Rounding out the region’s top 10 were logistics specialist ESR, South Korea’s IGIS Asset Management, Australia’s Lendlease and Blackstone.
ARA last week moved a step closer to a potential listing, announcing on 18 May that it was raising $500 million in a financing round led by Japan’s Sumitomo Mitsui Banking Corporation (SMBC), a move understood to be part of the run-up to an IPO on a public exchange.
The equity sale allies ARA with one of Japan’s largest financial conglomerates as the company plots a return to public stock markets less than five years after Warburg Pincus teamed up with chief executive John Lim to privatise Asia’s largest manager of real estate investment trusts.
The investment by SMBC was revealed less than a week after ARA announced the closing of a $1.3 billion joint buyout with the Japanese bank of Tokyo-based real estate investment manager Kenedix.
ARA will draw on SMBC’s cash infusion to continue executing its “raise, invest, manage and build” strategy. The Singaporean firm has raised over $16 billion in equity capital since 2016, supporting a gross transaction volume of almost $20 billion during the same period.