Savills Investment Management has launched a pan-Asian income and growth fund with a short-term target of becoming a €500m vehicle, following a first close of US$117m (€97m).
The Savills IM Asia-Pacific Income and Growth Fund (APACIG) will focus on income and value-add opportunities over four primary markets and a number of secondary markets in Asia-Pacific.
Greg Lapham, who has been appointed head of investment, Australia, for Savills IM, and is managing APACIG, told IPE Real Assets: “We continue to have discussions with investors, and these will likely lead to more capital.
“We have more than two years left in our capital raising period. Hopefully, this will be a circa €500m fund.”
APACIG, which targets an 8-10% internal rate return, will carry a maximum debt ratio of 60% at fund level. Lapham said the Australian platform now had four assets, valued at A$400m (€257m).
APACIG has two assets. Its latest acquisition, announced today, is an office building, located in Mascot in Sydney’s inner south acquired for A$151m. Last month, in partnership with Elanor Investors, APACIG acquired the Clifford Gardens mall in Toowoomba from Blackstone for A$145m.
Asked about sectors of interest, Lapham said: “We are quite opportunistic. Our focus is on delivering return. For instance, we are not going to be chasing industrial too hard because the yield is so low.”
While he continues to see opportunities offering attractive yield in Australia, Lapham said the next acquisition could be in Japan, where Savills IM had a strong local team.
After Japan, APACIG could look to New Zealand, and it continues to scout for opportunities in Singapore and South Korea, although the pricing of assets in these two countries was “a little more aggressive” due partially to the inability of their significant capital being able to travel, Lapham said.
Lapham, who joined Savills IM from BlackRock, where he was a managing director and CIO of APAC real estate, has built up an investment team in Sydney.
Savills IM’s investment director in Australia is Guy Sainsbury, who recently joined from Lendlease. The team is supported by investment manager Anthony Lupis and Jacob van Egmond as investment analyst.
To read the digital edition of the latest IPE Real Assets magazine click here.
