PGIM raises €580m for Asia Pacific real estate fund

PGIM Real Estate has raised €580m ($648.2m) for its Asia Property Fund III (ASPF III).

The real estate investment business of PGIM, the global investment management business of US-based Prudential Financial, bought four assets in Sydney, Kuala Lumpur, Shanghai and Tokyo for the fund.

Benett Theseira, managing director and head of Asia Pacific at PGIM Real Estate, said: “These four transactions demonstrate the depth of our market reach in Asia-Pacific, and we will continue to seek compelling opportunities throughout the region to invest across the risk spectrum on behalf of our clients.”

The new investments also include a debt facility, in addition to residential, office and retail properties.

The fund will provide a subordinated facility to one of Australia’s largest private developers to fund a multi-stage waterfront development, including more than 1,100 pre-sold apartments, located at Wentworth Point in Sydney. 

The ASPF III fund has bought two grade-A office properties with 27,805sqm of office space, as well as underground parking, in a mixed-use development in Shanghai. 

The Waterfront Place complex, at Chang Feng, is described as one of Shanghai’s more mature decentralised business districts.

The area is expected to benefit from the expansion of the Shanghai central business district.

PGIM said Waterfront Place was strategically located to benefit from its proximity to a five-star hotel, a shopping centre and a new metro line.

The ASPF III fund has also entered a joint venture with a Malaysian developer to build high-rise residential towers, known as the Puchong Kinrara development, in Kuala Lumpur.

The site, which covers two parcels of residential-zoned freehold land totalling around 9.5 acres, will have more than 900 residential units and 25 retail units.

The catchment area of the project is the fast-growing middle-income suburban township of Bukit Jalil.

Its fourth acquisition is Abercrombie & Fitch Company’s flagship store, comprising 11 storeys across 2,131sqm in Ginza, Tokyo.

PGIM said ASPF III would continue to invest in Asia Pacific real estate, including office, retail, residential and logistics, in both mature and emerging markets.

The company recently told IPE Real Estate its target markets were Australia, China, Japan, Malaysia, Singapore, Hong Kong and South Korea.

Speaking to IPE Real Estate earlier this yearTheseira said investing in core assets was ultimately about investing in future growth.

“Even though we are experiencing many bumps on the road today, from a long-term perspective, Asia’s growth is forecast to be 1-2% higher than in the US or Europe over the next 10-20 years,” he said.

“Because of the size of Asia GDP and its investable-grade real estate, investors can’t ignore Asia. If they are looking for diversification, they should participate in the growth of Asia through core strategy.

“One of the more exciting things about core in Asia is that the markets are becoming more established and more mature.”

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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