Ivanhoé Cambridge to double exposure in Asia

The firm paused making new investments in the first half of 2020 but restarted in H2, including setting up a dedicated vehicle in a new market.

Ivanhoé Cambridge, the real estate arm of Canada’s Caisse de dépôt et placement du Québec, is planning to double its real estate allocation in Asia-Pacific in the short to medium-term.

George Agethen, senior vice-president Asia-Pacific at Ivanhoé Cambridge, said at the MIPIM Asia Awards Forum last week that covid-19 had accelerated global investors’ appetite for Asia-Pacific real estate as the region had handled the crisis “slightly better than the others.”

It is understood that Asia-Pacific currently makes up 7 percent, or approximately C$4.5 billion ($3.5 billion; €2.9 billion) of the investor’s C$64 billion global portfolio, with a focus on the region’s industrial and multifamily sectors.

“Asia is already on the path of becoming more significant for international investors. Fifteen to 20 years ago, Asia was probably more niche. But there has been a lot of good developments, a lot more products and it is becoming a big slice of the pie,” Agethen said.

Ivanhoé Cambridge has been in Asia for almost 15 years and has offices in Hong Kong, Shanghai and Mumbai.

Although appetite to invest in the region has increased for many investors, establishing new relationships has been more difficult due to travel restrictions, according to Agethen. As a traditional real estate investor, Ivanhoé Cambridge considers it important to be able to “see” and “feel” the assets.

“A lot of our business models depend on finding the right partners including fund managers, operators, developers and fiduciary firms,” he said. The firm stopped making new investments and focused on asset management activities in the first half of 2020 but restarted the process after summer.

As establishing new relationships is challenging, it is understood the firm has made new investments in the region with existing partners. Last month it announced its first dedicated Japanese logistics vehicle, entering into a separate account with Hong Kong-headquartered real estate manager PAG to invest up to $400 million in Japanese logistics.

“We know PAG very well because we have invested in both their opportunistic fund series Secured Capital Real Estate Partners and core-plus fund series PAG Real Estate Partners,” Agethen told PERE in a separate interview. Apart from PAG, Ivanhoé Cambridge has partnerships with Sydney-headquartered logistics firm LOGOS to invest in Indonesia, Singapore, China, Australia and India.

Agethen added that ESG is also becoming a more important element when investors are looking at opportunities in Asia-Pacific. “We have a very ambitious target in reducing our carbon footprint. Very soon we will not make any investments unless that investment is adding onto our low carbon portfolio,” he said.