MSREI raises $650m for maiden Asia core fund – Exclusive

The firm has raised most of the equity for the pan-Asia open-ended core real estate fund from European investors, according to PERE sources.

Morgan Stanley Real Estate Investing (MSREI) has raised $650 million for its maiden core vehicle in Asia, PERE has learned.

According to sources familiar with the capital raising, most of the equity haul for the Prime Property Fund Asia has come from European investors. A spokesperson for MSREI declined to comment on the fund raising.

PERE had reported earlier that PFA Pension, Denmark’s largest commercial pension fund, is the anchor investor in the vehicle, which was introduced to the market in 2015. The Copenhagen-based investor is understood to have committed between $150 million and $200 million.

So far, MSREI has deployed $350 million from the pan-Asia, open-ended, core vehicle into deals in Japan, Korea and Australia. According to a report in the Australian Financial Review last June, the firm had seeded the vehicle with Macquarie Capital’s Sydney headquarter building. The real estate investment management business of the New York bank Morgan Stanley formed a joint venture with Sydney-based investment manager Charter Hall to acquire One Shelly Street for $525 million. One half of the stake reportedly was seeded into the Prime Property Fund.

MSREI’s fundraising news is yet more evidence of the growing appeal of lower risk investing strategies in Asia. In June last year, PAG raised $1.3 billion in commitments for its first core-plus real estate fund. The Hong Kong-based investment management fund received backing from 10 to 15 investors, which also included strong European backing with the likes of European insurer Allianz and the Dutch pension fund manager PGGM among its supporters.