Boston-headquartered AEW Capital Management, one of the world’s largest real estate investment managers, announced the final closing of its fourth Asia Pacific value-add fund with commitments totalling $1.54 billion.
The final amount raised for AEW Value Investors Asia IV exceeded the original target of $1.2 billion, with public and private pension funds as well as insurance companies based in Europe, the US, and Asia committing to it.
“This result not only reflects a sustained interest in institutional real estate in Asia Pacific among investors but also shows confidence in AEW’s execution in implementing a targeted value-add strategy,” said David Schaefer, CEO Asia Pacific for AEW.
The predecessor fund was capitalised with $1.12 billion, inclusive of co-investment capital. It made its final investment in 2019.
According to the announcement, the fourth fund will continue AEW’s value-add focus on the acquisition of logistics, multi-family, and office assets in key gateway cities across the Asia Pacific region, principally Singapore, Seoul, Beijing, Shanghai, Hong Kong, Sydney, Melbourne, Tokyo, and Osaka.
The fund is seeking to create value and drive overall returns through the repositioning, redevelopment, releasing, and refurbishment of commercial assets.
Founded in 1981, AEW Capital is one of the world’s largest real estate managers, with $88.6 billion of property and securities under management in North America, Europe, and Asia as of June 2021.
The final close of the Asia-focused value-add fund comes as AEW upgraded its average growth forecasts for 2021 across major markets in the region to 5.8%, year-on-year, from 5.0% in Q1.
Despite a slowdown in the global economy brought about by the effects of the health crisis, investors continue to plough more capital into real estate. Early this year, KKR & Co closed its first fund targeting real estate investments in Asia Pacific at $1.7 billion.
Warburg Pincus is also in the market to raise a $1.5-billion Asia real estate fund, its first vehicle with a dedicated focus on Asia’s burgeoning real estate market. It is also launching a special situations platform focused on the China real estate market.