Fund Termination Extended

In 2014, CBRE released The Great Wave of Fund Expiration, a special report which predicted that there will be wave of expirations of Asia Pacific-focused private equity real estate funds in 2015-2016. CBRE data shows that there are strong fund disposal activities in 2015 stood at US$25.5 billion, a figure 37% higher that the five-year average of US$18.7 billion.

However, of the 50 funds CBRE Research estimated would expire in 2015 and 2016, only 22% terminated as planned. Most funds opted to either extend their fund life or are still reviewing their exit strategies. Some fund managers have disposed of the more saleable assets in their portfolios, particularly those in highly liquid markets such as Japan and Australia.

Assets in less liquid markets such as China have proven to be more challenging to dispose of. CBRE Research has found that at least one third of outstanding assets to be disposed of in Asia Pacific are in China. Most are located in lower-tier cities.

This CBRE Research infographic provides an update on fund expirations in Asia Pacific; analyses market conditions and key risks in major markets; and provides recommendations for fund managers as to what they should do with the remaining assets in their portfolio.