PGIM Real Estate has raised just over €800m ($970m) for its fourth Asia-Pacific value-add fund.
The PGIM Asia Pacific Value Add Fund IV fund expects further commitments to bring the total raised to more than $1bn, giving it a $2.5bn deployment capacity.
The predecessor fund, which closed in 2016 raising €580m, is fully invested and currently selling assets.
Benett Theseira, head of Asia-Pacific for PGIM Real Estate, told IPE Real Assets that a substantial amount of the capital came from European institutions, many of which were repeat investors.
Theseira said the capital raise far exceeded its original target because investors saw significant opportunity in the region’s recovery from the COVID-19 pandemic.
“We are actively investing now. The market has remained fairly resilient, and we do see opportunities to acquire assets,” Theseira said. “We are comforted by the fact that, in general, the Asian economy has stood up well and handled the pandemic better. We do think Asia could lead the post-pandemic global recovery.”
However, he added: “We are mindful of the risks of resurgence, as we have seen in Korea and Japan. We are not out of the woods yet. There could be further disruptions to business and industry.”
Of PGIM’s investment strategy, he said: “Like most of our competitors, logistics and data centres are the priority sectors. We will be working on logistics and data centre deals now, and hope they will come to fruition shortly.”
While there was pressure on the office market from remote working, and rents in some markets, like Australia, had fallen, Theseira said the fund would look at office selectively.
“We are comfortable with retail, even though it is going through a tough time. We do think some retail assets with repositioning opportunity could be interesting.”
The fund would have a deployment capacity of close to $2.5bn over its term of up to eight years, but with the flexibility to roll over for longer. “The holding period of assets could be shorter – four to five years,” he added.
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