ASR Real Estate Investment Management, the real estate investment management division of Dutch insurer ASR, has raised €250 million from a Japanese institution for one its real estate funds.
The equity commitment by the unnamed investor into the ASR Dutch Prime Retail Fund, is an early example of what is expected to be a new wave of Asian institutional capital to come into Europe and the US.
Japanese development companies had previously been big investors in offshore real estate particularly the US in the 1980s but suffered some heavy losses in the 1990s that led to something of a retrenchment back to domestic markets. Since then, and certainly recently, however, there has been growing anticipation that the country’s institutional investors, keen to outperform domestic fixed income investments and to diversify their holdings, would deploy increasing amounts of capital offshore.
While most of the attention had been paid to the actions of Japan’s Government Pension Investment Fund, the world’s largest with more than $1 trillion in assets, which recently signaled its intent to invest up to 5 percent of those assets in alternatives including real estate, other Japanese institutions have been steadily putting money to work.
The unnamed investor in this instance has pooled its capital with investors from other parts of the world and now the fund’s capital raising since inception stands at more than €785 million. The fund itself now has nine institutions invested, including ASR, which is a seed investor. Its assets are valued about €1.3 billion and comprise approximately 200 Dutch retail properties. The fund’s risk/return status is core-plus.
Dick Gort, the chief executive officer of ASR REIM, said: “Having raised over €500 million in less than two years’ time from multiple European investors, we have now successfully implemented our strategy to further internationalize our investor base by attracting €250 million of equity from an Asian institution.”
He added: “We targeted this market as we recognized that the quality and diversification of the retail portfolio and the relatively strong income return would be an optimum fit to the investment criteria of our new client.”
ASR REIM was advised by CBRE Capital Advisors. Mark Evans, head of equity placement at the firm said: “2014 was an extremely competitive environment for core/core plus fund raising. Therefore it was paramount that we were able to articulate to potential investors the attractive returns of the ASR Dutch Prime Retail Fund and the modern fund structure. We were also able to demonstrate the low volatility of income return generated by this diversified portfolio with index-linked rents. Furthermore, the Fund’s ongoing pipeline of acquisitions and asset management opportunities were key to this investor.”
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