Due to the improved fundraising environment and growing number of investors being lured back to the Asia-Pacific, CBRE Research forecasts that approximately US$53bn of real estate private equity capital will be deployed into the region by 2020.
China, Japan, and Australia will be the top three recipients of the deployed capital within the next three years.
“Since 2014, Asia Pacific-focused closed-end real estate funds have deployed US$63 billion out of an estimated war chest of US$116 billion. Australia, Japan and China account for nearly 75% of total investment,” CBRE said.
“Fund managers will carefully plan the allocation of their capital and are unlikely to wait much longer for deployment, meaning that 2018 is likely to see significant purchasing activity.”
Core or core-plus funds have mainly focused on the Australian market, where core assets account for more than 75% of transactions.
“The volume of capital entering Australia will be smaller compared to the past three years,” CBRE said. “Sydney and Melbourne will remain the main focus but there is growing interest in secondary cities such as Brisbane and alternative asset classes such as student housing and cold storage.”
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