TH Real Estate has launched a $2bn (€1.75bn) open-ended core property Asia-Pacific cities fund.
IPE Real Assets reported a year ago that the $115bn manager was planning to launch Asia Pacific Cities Fund to invest in core real estate in the region.
TH Real Estate said it has seeded the fund with its first asset, an office tower in Sydney, purchased today for AUD180m (€114.9m). The manager’s parent company, TIAA, has committed an initial co-investment of $200m.
The fund has an overall target size of more than $2bn over a five-year period and expects a long-term return of 7-10% per annum.
The vehicle -which is modelled on TH Real Estate’s core, open-ended European Cities Fund - will focus on 17 principal cities, including Sydney, Tokyo, Brisbane, Singapore and Seoul.
Louise Kavanagh, TH Real Estate’s Hong Kong-based managing director, said: “The Asia Pacific Cities Fund is designed to offer investors access to what we term future-proof, resilient cities in an exciting growing region.”
Kavanagh said her team would use a granular approach to stock selection, focussing on asset and submarket drivers to complement a cities-based approach and to enhance returns to clients.
“Our long-term investment approach seeks strong returns through market cycles, underpinned by structural trends for long-term growth, tapping into Asia-Pacific’s growing economic dominance,” she said.
Nick Evans, TH Real Estate’s executive director and head of Australia, said: “It’s positive to see that Sydney – the nerve centre of Australia’s commercial and financial activities – has led the charge in being home to the fund’s first asset.”
Evans told IPE Real Assets that the firm had a strong, credible team in Australia which had been able to access assets such as 183 Clarence Street, a heritage building which will be redeveloped into an iconic office tower,
“This is what we can do. We are able to add value and create core assets,” he said.
The Asia Pacific Cities Fund follows on from TH Real Estate’s flagship European Cities Fund, launched in 2016.