Asia has emerged as the top destination for private equity real estate players, with more than $16.2 billion of capital raised in 2008 to date, according to proprietary PERE magazine data.
The total capital raised in dedicated Asia value-add and opportunistic funds this year is almost triple that of last year. By October 2007, just $5.7 billion had been raised in Asia-focused funds – at the time representing 13 percent of all capital raised in funds closed for that period.
By comparison, the $16.2 billion raised to date in 2008 accounts for 28 percent of total funds closed so far this year – with 25 percent of private equity real estate funds targeting the Americas, 24 percent adopting a global strategy and 23 percent targeting Europe.
There have been several large fundraises for the Asia region this year, including Merrill Lynch’s first Asia-focused real estate fund, the $2.7 billion Merrill Lynch Asia Real Estate Opportunity Fund, which closed this month. MGPA and LaSalle Investment Management have also both closed large funds recently, with MGPA closing its MGPA Asia Fund III on $3.9 billion, and LaSalle closing its LaSalle Asia Opportunity Fund III on $3.2 billion.
According to PERE, Asia-focused funds currently in market have also seen a dramatic increase over previous years, with $30.3 billion being targeted for Asia-specific strategies by private equity real estate firms. By the same period last year, just $14.2 billion was being targeted by Asia-focused funds in market.
Overall, 2008 has seen $57.3 billion in capital already raised by private equity real estate funds targeting all geographies and strategies. Another $138.4 billion is being sought by real estate funds still in the market.