CBRE GI nixes sidecar option for $900m Asia value-add – Exclusive

The previous fund in the investment manager's Asia value-add series, along with its co-investment vehicles, corralled $1bn in 2017.

Los-Angeles based investment manager CBRE Global Investors has raised around $700 million for its fifth value-add fund in Asia, PERE has learned.

Three sources familiar with the capital raise told PERE that the firm launched CBRE Asia Value Partners V earlier this year, with a circa $700 million first close achieved in July. CBRE GI is planning to hold a final close for the vehicle at $900 million before the end of 2019.

Marking a departure from its predecessor vehicle’s fundraising strategy, CBRE GI will not be raising any sidecars alongside this latest fund, according of two of the sources. CBRE Asia Value Partners IV corralled $1 billion equity from 21 institutional investors in the Americas, Asia-Pacific and EMEA, which included an unspecified amount of capital raised for co-investment vehicles, or sidecars. Including leverage, Fund IV had a total purchasing power of more than $2.5 billion, according to CBRE GI’s website.

CBRE GI declined to comment on the fundraise.

Investors have continued to demonstrate an appetite for value-add investing in recent years. According to the Investment Intentions survey of 154 investors published by ANREV this January, there was a preference for value-add investments over core investments for the second year running. Around 44.3 percent of the respondents chose the value-add strategy over core in terms of risk-adjusted performance prospects in Asia-Pacific.

Fund V will follow the same investment strategy as Fund IV, which according to the website, was to “create core logistics assets through value-add investment initiatives or de-risked development” as well as other value-add opportunities in other sectors in the region. The fund’s investments will target a 15 percent net internal rate of return, according to two sources.

The logistics sector has become a focus area for the firm’s value-add strategy, just like its other counterparts in the region, given structural factors driving tenant and investment demand. The firm also launched a partnership with the Australian logistics property developer LOGOS to set up its first yuan-denominated vehicle for logistics investments in China this year. The onshore vehicle is understood to have deployed 70 percent of the $800 million it raised as of July.