REAL ESTATE - Stichting Pensioenfonds ABP, Europe’s largest pension fund, plans to increase its real estate allocation in Asia, citing the increasing professionalism of the Asian real estate and the emergence of REITs.
“The increasing professionalism of the Asian real estate market makes it more interesting for us,” spokesman Thijs Steger of the €200bn civil service fund said, pointing to improving corporate governance, increased transparency and more emphasis on fund manager performance.
The fund plans to exploit “attractive growth prospects” from comparatively bullish office markets in Hong Kong and Singapore. As well as REITs, Steger said it would look at non-listed real estate opportunities in the region.
Currently, the fund’s real estate portfolio is 44% invested in Europe, 44% in the US and 9% in Asia. Steger would not comment on the specific allocations to Asian real estate but he denied reports that the fund would re-route existing allocations in other regions. “ABP will not significantly re-allocate assets towards Asia,” he said.
Despite the denial, ABP plans to set up an office in the region. “We’d like to get more investment experience in the Asian region and one way of doing it is to open an office there,” he said. “The whole business of opening an office is under consideration.”