JP Morgan AM snaps up Aviva Investors' Asia Pacific platform

JP Morgan Asset Management has bought Aviva Investors’ Asia Pacific direct real estate investment platform.

The deal sees the US investment manager take on Aviva Investors’ existing core and value-added real estate funds and includes Aviva’s operations in Australia, as well as Japan and Singapore.

Aviva Investors’ Asia Pacific Property Fund has typically aimed for a blend of income and capital growth, investing in direct commercial real estate.

Key investments made by the fund include the Shore City mall in New Zealand and the Alinta Plaza office asset in Perth, Australia.

The fund has also invested in Tokyo’s office and industrial sectors.

It can invest up to 30% in cash and Asian listed real estate securities, including REITs.

As of October, the £193.8m (€244.3m) fund was 80.3% weighted to property and 19.7% to cash, according to a factsheet.

The open-ended fund, which launched in late 2008, has also invested in China, Hong Kong, India, Malaysia, New Zealand, South Korea and Taiwan.

Managed by Daniel McDonald since 2010, the fund has respective 37% and 32% weightings to office and retail.

JP Morgan Asset Management said Aviva Investors’ multi-manager activity in the Asia Pacific region did not form part of the sale.

Joe Azelby, head of global real assets, said growing in the region had been a “strategic imperative”.

The investment manager, in Asian property since 2006, said the acquisition adds real estate presence in India and Greater China.

“We have expanded our real estate investment capabilities, across the full risk spectrum from core to opportunistic strategies, to help our clients increase their allocations to dynamic growth markets in Asia Pacific,” Azelby added.

Around 16 Aviva staff in Hong Kong, Mumbai, Singapore, Shanghai and Sydney will transfer to JP Morgan Asset Management’s global real assets team.

A sixth office is due to open early next year in Tokyo. Aviva Investors, with Secured Capital Investment Management, last year closed the Tokyo Recovery Fund, raising $300m and exceeding its initial $250m equity target.

Writing in October, Aviva Investors’ McDonald said: “We expect core real estate in Japan – in particular, Tokyo – to continue to be in strong demand in investors’ flight to safety.”

What direction the fund’s new owners decide to take it in remains to be seen.

McDonald said the fund favours “long-term strategic investment” in China.

The retail sector, he wrote, “remains one of the most stable sectors in the APAC region”.

“We continue to favour non-discretionary retail,” he added.

“The recovery momentum of the industrial sector is building, and we continue to favour the logistics sector in the Eastern seaboard of Australia, in particular Sydney and Melbourne.”