The open-end PGIM Real Estate Asia Core Fund has raised US$447m (€409m) in equity capital in its first close from American, Canadian, German, Swiss and Japanese investors.
The fund has a diversified strategy investing in the key cities of Japan, Australia, Singapore, Hong Kong, South Korea and China, across the office, retail, industrial and residential sectors.
Benett Theseira, head of Asia-Pacific for PGIM Real Estate, said: “The initial close is an early, yet significant step in growing the fund and expanding our investor base to become the market leader of core open-end funds in the region.”
Theseira told IPE Real Assets the fund was launched with initial capital from the Prudential Financial in the US and Japan “a while back”.
It began fundraising last year.
“Our focus then was to acquire a seed portfolio. The fund has invested in a US$290m portfolio. It has a multifamily asset in Tokyo, an office in Seoul and a retail/office property in Sydney.”
Theseira said its next priority would be to acquire either an office or logistics asset in Singapore.
Asked if the diversified fund would also look to retail real estate, Theseira said: “We do have an allocation for retail and we do already have some retail exposure through our Australian investment.
“Generally, we are quite comfortable with the retail sector. We are selective and we believe that there is a good opportunity to buy assets well and to add value.”
Theseira said he was looking to deploy the capital within 12 months.
“Our focus is on resilience from the point of view of income and valuation. We want to make sure the pricing is right before we acquire.”
He said PGIM Real Estate had a strong platform across the region and was able to provide active asset management to add value to assets.
The fund has attracted strong investor interest from the US and Europe with investors seeking income and diversification.
“The yield in this region is not much different from Europe or the US, but we do have a long-term positive growth story and the yield spread is also quite healthy.
“If we select the right assets, potentially they will outperform.”
The launch of Asia Core completed PGIM Real Estate’s global suite of core open-end real estate funds, and follows the €304m European Core Fund which launched earlier this year.
