Just days after announcing the close of its $3.9bn Asia-Pacific Infrastructure Fund, global private equity giants, KKR, announced the closing of its first Asia real estate fund at $1.7bn.
The fund is named KKR Asia Real Estate Partners (AREP) and will focus on opportunistic real estate investments across Asia Pacific.
Commenting on the successful closing Ming Lu, Head of KKR Asia Pacific said, “Asia Pacific’s real estate sector needs sophisticated investment and innovative operational solutions to meet the high demand for modernized properties and developments that are required to stay ahead of the region’s rapid growth. Our experienced team is well-positioned to capture compelling opportunities and add value to our portfolio to generate attractive, yield-adjusted returns for our investors.”
AREP will use both equity and debt to invest in opportunities and the fund will focus on a range of sectors, including commercial, industrial and residential properties, as well as opportunistically evaluating assets in emerging alternative sectors.
John Pattar, Head of Asia Pacific Real Estate at KKR, said, “The transformation of Asia Pacific’s real estate sector is creating a strong pipeline of new and exciting opportunities. Increased domestic consumption, productivity and urbanization – combined with the acceleration of e-commerce and platform-based businesses and the evolution of the traditional office landscape – is fundamentally reshaping the region’s real estate sector.”
Investors into AREP included public and corporate pensions, sovereign wealth funds, insurance companies, endowments, private banking platforms, family offices and high net worth individual investors. Jon Fiorello, Head of KKR’s Real Estate Strategies Team commented, “Our ability to raise this fund in the midst of a pandemic is a testament to the strength of KKR’s Asia Pacific franchise, proven real estate track record around the world, and the trust in our ability to create value,”
Since 2011 KKR has invested more than $1.5bn of equity into approximately 20 property deals across Asia Pacific. Assets include mixed use, commercial, industrial, hotel, office and retail properties. Globally the firm has approximately $14bn of real estate assets under management, including properties in the US, Europe and Asia Pacific.
Commenting on the new fund, Ralph Rosenberg, Global Head of KKR Real Estate, said, “AREP’s close is an exciting milestone for our global real estate platform. Asia Pacific is an integral and increasingly important part of our investment strategy given the attractive growth and demographic drivers shared by markets across the region.”