KKR closes first Asia Pacific fund for real estate investments at $1.7b

Photo: Reuters

US-based investment firm KKR & Co said on Thursday it had closed its first fund targeting real estate investments in Asia Pacific at $1.7 billion.

The announcement comes days after KKR closed its inaugural Asia infrastructure fund, as the private equity powerhouse expands its platforms in the region.

John Pattar, KKR head of real estate Asia, told Reuters the new fund would focus on Asia’s urbanization trends, corporate carve-outs of non-core real estate assets in Japan, and also take-private opportunities in markets including Australia, Singapore, and Japan.

“Increased domestic consumption, productivity, and urbanization – combined with the acceleration of e-commerce and platform-based businesses and the evolution of the traditional office landscape – is fundamentally reshaping the region’s real estate sector,” he said.

The fund is also looking at opportunities in countries such as South Korea, which has recovered from the COVID-19 pandemic, said Hong Kong-based Pattar, a veteran real estate investor poached by KKR in 2018 to lead its Asia real estate efforts.

“We look at markets that handle COVID best,” he said. “…Asia Pacific is the first to recover in 2021.”

KKR’s real estate fundraising comes as private equity firms globally have expanded from a model of buying out companies to turn around and sell for profit. They now invest through a range of alternative asset management products including infrastructure, real estate, hedge funds, and credit.

Investment firms raised $9 billion in 47 Asia-focused real estate funds last year, following a record $26 billion raised in 2019, according to data provider Preqin. KKR’s U.S.-based rival Blackstone Group raised the region’s biggest real estate fund in 2018 at $7.1 billion.

KKR will also be competing with regional firms such as Hillhouse Capital Group, which has hired former Warburg Pincus and Blackstone dealmakers to build out its real estate capabilities.

The New York-headquartered firm launched its dedicated global real estate platform in 2011 and has about $14 billion of real estate assets under management as of the end of September 2020.

In Asia Pacific, it has deployed more than $1.5 billion of equity across about 20 real estate transactions since 2011.

Its portfolio includes office tower Namsan Square in Seoul, Oasis Shopping Centre in Australia’s Gold Coast and Hong Kong retail assets Lake Silver and Parkside.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.