US/GLOBAL - US-based asset manager T. Rowe Price is launching a global real Estate strategy in a bid to expand its global investment opportunities.
The Global Real Estate Securities Fund is being launched to provide long-term total return growth by primarily investing in a diversified global portfolio of real estate securities.
Access to the fund is available through a segregated account and through T. Rowe Price's Luxembourg-based SICAV (societe d'investissement a capitale variable) but the firm is still awaiting regulatory approval in other jurisdictions.
The firm with €245bn in assets under management intends is to invest only in real estate operating companies (REOCS), real estate investment trusts (REITS) and in the transferable equity and equity-related securities of companies that commit the majority of their assets to real estate, said David Lee, vice president and portfolio manager at T. Rowe Price.
"Investing in real estate in global markets offers investors a chance to significantly diversify their portfolios. Local real estate supply and demand fundamentals are usually particular to a region and can have very little correlation with property fundamentals in other locations across the globe."
The strategy will focus largely on income-producing real estate companies in the United States, Hong Kong, Japan, the United Kingdom and Australia.
According to Lee, long-term leases may provide better protection from income decreases during recessions and may prosper from pricing power when leases renew during strong economies.
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