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Manulife IM to expand real estate presence in North America, Asia

In North America, Marc Feliciano, the Boston-based firm’s new head of real estate private markets, is targeting significant growth in alternative property types.

Marc Feliciano has had plenty on his agenda since joining Manulife Investment Management, the investment management arm of Canadian insurance company and financial services provider Manulife, as global head of its real estate private markets division last month.

In his new role, the former DWS executive will be overseeing a portfolio of around $20 billion in real estate. His plan is to expand the firm’s presence in its two key markets, North America and Asia. Manulife also has plans to eventually expand in Europe, but Feliciano’s initial focus will be on the two regions in which the firm is already invested.

The firm has already made moves in the latter, having acquired a minority stake in ARCH Capital Management as it eyes double-digit percentage growth in its AUM in the region. The portfolio, as of the end of Q3 2021, was around 12 percent allocated to the region, with the remainder in North America. However, ARCH is expected to be more of a one-off as far as M&A transactions in the context of the real estate private markets business’s overall growth strategy, Feliciano told PERE.

Last week, Manulife also announced an agreement to launch a ¥19.8 billion ($170 million; €160 million) joint venture with Tokyo-based real estate company Kenedix to acquire multifamily assets in Japan’s major cities. The partnership has signed sale and purchase agreements to acquire a seed portfolio comprising nine properties and also has lined up a pipeline of additional assets to be purchased in the near future.

For the North American markets, the plan is simple: to establish new strategic account partnerships targeting alternative property types.

“We’re going to go beyond the main four food groups,” Feliciano said. “What you’ll start to see is [us] developing the right strategic partnerships as we start to enter other niche sectors.”

In particular, Manulife plans to target the alternative sectors of life sciences, data centers and single-family rental homes. All three benefit from what Feliciano describes as the mega-trends driving the real estate market: ESG, the digitization of real estate and demographic shifts. Feliciano said that the affordability aspect of residential, including multifamily and single-family homes, will factor heavily in new strategies the investor enters into. He acknowledged incorporating affordability into the firm’s real estate investment strategies puts constraints on rent increases but the ESG considerations outweigh any limits.

Feliciano, hired in February, plans growth in the existing portfolio before expansion into Europe.

The firm intends to continue investing primarily in core or core-plus strategies, which currently represent the bulk of the firm’s real estate investments. However, Feliciano said he sees opportunities to expand that slightly via both development and value-added opportunities both in the sought-after asset classes as well as tactically in the more enigmatic retail and office sectors. He admitted taking on those riskier assets requires a sharper asset management capability. Office is likely to factor more, but Feliciano said he is still waiting for the dust to settle a little.

“I continue to believe that offices are a hub of business activity and not the home,” he said. “But a five-day work week is not part of the future. What will the space requirements be of three-to-four-day work weeks?”

Feliciano’s role will have him oversee all aspects of the firm’s real estate equity strategy. The entire real estate team will report to him, including all of its senior investment professionals, such as Rob Maulden, global head of real estate development; Michael McNamara, global head of real estate investments. Regional heads Gregory Sweeney, who will oversee Canada; Pritesh Patel, who will be in charge of the US; and Kenny Lam, who will oversee Asia are all in his purview as well.