Prior to the Global Financial Crisis (GFC) Asian Pacific experienced a boom of real estate fund formation driven by a heady mix of liquidity, capital market fundamentals and risk/return parameters.
CBRE data shows that around US$91 billion of capital was raised by 184 private real estate funds in the region between 2005 and 2008. Most funds in Asia Pacific were closed-end funds which comprise of a fixed life span. Based on the typical fund life of eight years, CBRE believes that approximately 84 funds are planned to terminate between 2013 and 2016. Peak period of expiry will be in 2015 and 2016, when approximately 50 funds with a gross asset value of about US$40 billion will expire. According to historical disposition levels since 2007, CBRE forecasts that the market will only be able to absorb around 75% of the liquidity created by closed-end funds scheduled to expire in 2015 and 2016. This paper will address the implications for fund managers under such scenario including how they position themselves in the current moment and discuss options they should consider beyond termination.
Contacts
| Henry Chin, Ph.D. Head of Research, Asia Pacific +852 2820 8160 |
| Ada Choi, CFA Head of Capital Markets Research, Asia Pacific +852 2820 2871 |
Karie Kwan Operations Manager, Asia Pacific +852 2820 2800 |
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| Leo Chung, CFA Senior Analyst, Asia Pacific +852 2820 1527 |
Nick Crockett Executive Director, Asia Pacific +65 6229 1136 |
Junichiro Muto Senior Director, Asia Pacific +81 352889519 |
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| Canon Yau Director, Asia Pacific +852 2820 6597 |
Sharon Law, CFA Director, Asia Pacific +852 2820 6559 |
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