Asia property funds to top $200 billion in coming yrs

8 Dec 2009, 1521 hrs IST,

 

HONG KONG: Asia's property fund size will expand by more

 than 50 percent in the next two to three years 

to $200 billion, driven by demand from 

institutional investors from countries including China,

 industry executives said on Tuesday.

 

Pension funds, sovereign wealth funds

and affluent individuals would 

likely boost their portfolios for real estate funds

 in coming years after appetites waned sharply during 

the sharp economic downturn earlier this year, 

the executives told Reuters. 

"The next 12 months will probably be a bit slow 

because we are still coming out of this difficult

 global situation, but then I think it will pick up

more quickly after that," said Nicholas Loup, 

Asia-Pacific chief executive of UK-based private

 property group Grosvenor Ltd. 

Asia's fund managers have $130.9 billion of property

 assets under management, based on a survey by the 

Asian Association for Investors in Non-listed 

Real Estate Vehicles, a non-profit organisation 

focussing on fund-related companies in the region.

The current global property fund totalled $409.6 billion,

 the association's first-ever survey showed. Loup, 

who is also chairman of the association, said Asia's

 fund size could easily top $200 billion over 

the next few years, barring risks external to the 

region, such as debt problems faced by financial 

institutions in markets outside Asia. 

"The big sovereign wealth funds in the region, 

the Chinese insurance companies, will start investing,

 (and) you'll see the Middle East looking more eastwards

 for their capital to be deployed," said Willem de Geus,

 managing director for Morgan Stanley Asia. 

Morgan Stanley, Singapore's CapitaLand Financial and

 Australia's AMP Capital, are Asia's top three property 

fund managers, making up nearly 40 percent of the region's

 total property funds, the survey showed. With growing 

appetites for property funds in Asia, Morgan Stanley is 

considering launching products aimed at institutional 

investors in potentially lucrative emerging markets. 

"We are doing some homework at the moment on domestic 

Chinese funds and domestic Indian funds. We haven't 

decided on anything yet," de Geus said.

 

source: REUTERS