SEB Asset Management is raising capital for two new Asia-focused real estate funds, SEB Asian Property II and SEB Asia REI. The two investment vehicles, each of which are targeting €600 million in equity, are being marketed to institutional investors and high-net-worth individuals, who already have committed €100 million to the funds. With leverage of 50 percent, each fund is expected to have a total investment volume of up to €1.2 billion. The funds will be managed by SEB's eight-person team in Singapore.
SEB Asian Property II will pursue a core-plus and value-added strategy and aim to achieve an internal rate of return of 12 percent over an eight-year investment period. The fund, which has a minimum investment amount of €15 million, will focus on office, retail, industrial and residential properties in China, Japan, Singapore and South Korea, with a maximum 40 percent allocation to development projects.
SEB Asia REI, a core and core-plus vehicle with an average target return of 8 percent, will make investments in office, retail, logistics and residential real estate. The fund, which requires a minimum investment amount of €20 million, primarily will acquire fully-leased properties, with a similar geographic focus to SEB Asian Property II.
“Not only is the Asia-Pacific region the world’s fastest-growing region and likely to represent a larger proportion of global economic output than Western Europe and North America together by the start of the next decade,” said Choy-Soon Chua, a managing director responsible for real estate investment at SEB Asset Management, in a statement. “The mix of mature markets like Japan or Singapore and emerging economies such as China present a large number of investment opportunities.”
The two new funds are SEB’s latest Asia offerings following the 2007 launch of its first Asia real estate fund, SEB Asia Property Fund, a core-plus vehicle with an IRR of 9 percent.