Singapore-based Asian real estate investment firm Pacific Star is in the process of raising $2 billion for its innovative Asia Fund Select Concept Fund. This initiative marks a significant development in the real estate investment world, as it represents an open-ended fund specifically designed for institutional investors operating on a global scale.
Fund Strategy and Geographic Focus
The fund's investment strategy encompasses a broad geographical reach, spanning diverse real estate projects across the Asian continent. Fritz Nehrig, the senior vice-president for fund management at Pacific Star, elaborates on the fund's expansive capacity, stating that it can accommodate investments from India to various Southeast Asian markets including Vietnam and Malaysia, extending further to Japan, Korea, and China. "The fund is open to institutional investors," Nehrig confirms. He further notes a particularly strong interest from European and Middle Eastern investors, while also observing demand within Asia due to the region's robust economic fundamentals, which stand in contrast to current investment prospects in the US and Europe.
Pacific Star's Market Weightings for 2009
Pacific Star's strategic market weightings for the Asia-Pacific real estate sector in 2009 and beyond are as follows:
Overweight:
- Kuala Lumpur: Residential, Retail, and Office
- Seoul: Retail and Office
- Tokyo: Residential, Retail, and Office
- Shanghai: Retail and Office
- Beijing: Retail
- Hong Kong: Residential and Retail
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
A Note of Caution for Investors
In its recent 2009 outlook, Pacific Star included a cautionary message for investors, suggesting that excess liquidity, as opposed to a shortage of capital, could continue to impact Asian markets in the longer term. This perspective underscores the importance of carefully considering potential challenges despite the region's promising economic foundation.