BlackRock Real Assets has raised $1.17bn (€972.8m) for its fifth Asia Pacific value-add fund.

The manager said the BlackRock Asia Property Fund V (AFV) fund, backed by a diverse group of new and existing institutional investors across Europe, Asia and the Americas, exceeded its $1bn target.

Investors in the fund include private pension funds, insurance companies, sovereign wealth funds, family offices and endowments, BlackRock said, adding that 75% of clients in the predecessor fund invested again in AFV.

AFV aims to primarily generate returns from repositioning, rebuilding, re-leasing and recapitalising real estate assets, with a primary focus on Japan, Australia, Singapore, China and Hong Kong.

John Saunders, the head of BlackRock Asia Pacific Real Estate, said the strategy remains tilted towards the conservative end of the value-add spectrum to build a portfolio of cash-generating assets offering a large spread between yield and funding costs.

“This has proven to be a very resilient strategy during 2020, during which we have seen rent collection, occupancy levels and leasing remaining very stable and consistently strong throughout the pandemic.”

Hamish MacDonald, head of investments for BlackRock Asia Pacific Real Estate, said asset prices have seen divergent trends across markets and sectors during the pandemic.

“Rapid acceleration in e-commerce services is driving up appetite for industrial and logistics assets, while the downturn in demand for office assets is presenting favourable entry points to selective markets in the region.”

Jim Barry, CIO of BlackRock Alternatives Investors and global head of BlackRock Real Assets, said: “We are pleased to see such strong fundraising performance from our Asia Pacific franchise, which adds to the solid foundation of our global real estate platform.

“This positions us extremely well, as we seek to provide truly regional strategies which also exploit our global scale and that will allow our investors to diversify their investment options and increase allocations in private markets in this pervasively low-yield environment.”

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