Pacific Star to raise $2 Billion for Asian Real Estate

Pacific Star, a Singapore-based Asian real estate investment house,
says it is raising $2 billion for its new Asia Fund Select Concept Fund.
The fund will be the first of its kind in real estate investment, being
open-ended and targeted at institutional investors worldwide.

The fund will invest in real estate projects all over Asia. Fritz Nehrig,
senior vice-president for fund management at Pacific Star, says the
fund has capacity for investment from India to Southeast Asia markets
such as Vietnam and Malaysia, to Japan, Korea and China.

Nehrig says the fund is open to institutional investors. European and
Middle Eastern investors have expressed the strongest interest, although
there is some demand in Asia as well, thanks to Asia’s strong underlying
economic fundamentals compared to other opportunities available in the
US and Europe.

Pacific Star is also structuring the offer through fund of funds and
other indirect umbrella investment vehicles. In particular, the fund
is targeted at institutions previously unexposed to Asian real estate
markets in such a liquid format, without the usual restriction of closed-end
commitments.

For the rest of this year through to 2009, Pacific Star’s weightings
for Asia-Pacific real estate markets are as follows:

Overweight: residential, retail and office in Kuala Lumpur; retail
and office in Seoul; residential, retail and office in Tokyo; retail
and office in Shanghai; retail in Beijing; and residential and retail
in Hong Kong.

Neutral with selective acquisitions: Bangkok, Singapore, Jakarta retail,
Shanghai residential, Beijing residential, Beijing office, Hong Kong
office.

Underweight with opportunistic purchases: Jakarta office, Seoul residential.

In its latest 2009 outlook, the real estate house has added a word
of caution for investors – excess liquidity, rather than capital shortage,
might continue to plague Asian markets over the longer term.

Photo: Second Howrah bridge in Kolkata by Akash Debnath, licensed under CC BY-SA 4.0, via Wikimedia Commons.