Fillip for core RE in Asia with $400m Invesco closing

Large equity commitments by western investors including LACERA and CALSTRS into Invesco’s Real Estate Asia Fund in an early wave of institutional support for lower-risk/return private real estate strategies in the region.

Invesco Real Estate has raised the first $400 million for its pan-Asia Invesco Real Estate Asia Fund in an early indicator that western institutional investors are embracing core property strategies in the region.

PERE can reveal that the property investment management subsidiary of global asset manager Invesco has equity commitments for the open-ended vehicle from around five North America and European institutions, among them Los Angeles County Employees Retirement Association (LACERA) and the California State Teachers’ Retirement System among others. 

Invesco is expecting to raise $1 billion for the fund over the coming five years although it could grow to beyond that mark thereafter.

Investors in Invesco’s first Asia core real estate fund are expected soon to see approximately 30 percent of its current capital invested in a Tokyo office building in a transaction understood to be in its final throes before completion.
The capital rising by Invesco comes at a time of enthusiasm for lower-risk/return private real estate investing strategies in Asia. While not the first manager to introduce such a vehicle, Invesco’s success in attracting western capital for a strategy that would take in core markets in Japan and Australia in the first instance but also Hong Kong, Singapore, China and South Korea over time, will be welcome by a growing number of rival managers promoting similar strategies.

Among Invesco’s rivals in the midst of raising capital for core real estate funds in Asia are Blackrock, SEB Asset Management and SC Capital and PERE understands there is another US financial institution also on the cusp of introducing a pan-Asia core real estate investment fund with a similar capital raising target. Such is the demand for such assets in the region that even Aberdeen Asset Management, the global asset manager that invests in private real estate predominantly via multi-manager funds, is poised to launch the region’s first Asia core fund of funds.

While Invesco’s rising will add to the increasing momentum behind core real estate funds in Asia, the first vehicle in the space actually was launched back in 2007 by PRUPIM, the property investment management arm of UK insurer Prudential now known as M&G Real Estate, and LaSalle Investment Management, the Chicago-based real estate investment management firm. That vehicle, which today has more than $1.2 billion in committed equity, is today managed solely by M&G Real Estate after it severed its management ties with LaSalle.
Invesco declined to comment.