The Employees’ Retirement System of Texas is looking to focus more of its international real estate investments on sectors that are considered niche even in the US.
“In terms of product types, we want to see more niche area products,” said Simon Mok, head portfolio manager of international private real estate, in an interview at the PERE Network Asia Summit, held in Singapore last week.
One such product type is industrial outdoor storage, an increasingly popular strategy in the US involving infill logistics sites that can be used for truck terminals or storage of construction material. “They aren’t necessarily a very good-looking piece of real estate, but they have a lot of usage and they can be converted into logistics use or modern logistics use,” he said. “So that is something maybe we could explore in Asia. I know Australia has something like this, but we’re hoping to see more.”
Manufactured housing has also attracted a lot of investor interest in the US as it is a strategy that is low cost but can be very profitable. “We are seeing some in Australia, we hope to see more across Asia,” he said. “The overall costs for occupants can be lower and the building costs are lower. So overall, I think this is going to be a pretty profitable asset class if we can bring it to Asia.”
Watch the video above to learn more about Texas ERS’s changes to its real estate allocation and what its investment activity in the asset class looks like for 2024.
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