Real estate opportunity funds in Asia generated a higher total return in 2011 than funds in the region invested via core and value-added strategies, according to the Asian Association for Investors in Non-listed Real Estate Vehicles (ANREV).
In its ANREV Annual Index 2011, the first annual index report produced by the association since its launch at the end of last year, ANREV reported that its 24-strong sample pool of opportunity funds generated a total return of 12 percent in 2011. While this reflected a dip from the 14.8 percent return that 19 opportunity funds it monitored produced in 2010, ANREV said they still retuned more than lower-risk core funds in Asia which produced a total return of 8.2 percent.
The 19 value-added funds it monitored in 2011, on the other hand, produced a lowly 0.2 percent. While that performance was low it was actually a marked improvement on 2009 when 15 funds included in the association’s research returned -28.2 percent.
While the opportunity fund numbers were telling, 30 percent of ANREV’s pool of opportunity funds was from Singapore and another 30 percent from Japan, two countries more conducive to core strategies than opportunistic. By contrast, just 19 percent was from China and there were no Indian funds mentioned in the sample. Those two countries are more widely considered as opportunistic marketplaces on account of their large development potential.
Nonetheless, the index has already grown from 42 funds to 65 – reflecting more than $65 billion of assets under management – in a matter of months and ANREV has enormous institutional investor and fund manager support to continue growing.
As such, future indexes are likely to continue to better reflect the performance of the regions’ non-listed fund universe. Alan Dalgleish, director of research and professional standards at ANREV said in an announcement on the annual report: “The results offer meaningful insights into the performance of the markets in 2011 but also demonstrate the commitment in the industry to transparency around fund performance. An increase in the number of funds contributing information this year means we have been able to provide China and Australia sub-indices for the first time.”
ANREV reported that, overall, in 2011 all the funds in its sample pool produced an overall return of 8.2 percent, slightly down on the 10.3 percent produced in 2010