Despite a tough year for the property sector, BlackRock have successfully raised $1.175bn for their latest Asia-focused value-add property fund. The Asia Property Fund V (APV) announced its first closing in September 2020 having raised $500m, however at the close of this further funding round, APV had raised $175m more than the one billion originally targeted.
Commenting on the successful raise, Hong Kong-based John Saunders, head of BlackRock Asia Pacific Real Estate said, “This excellent outcome is particularly welcome, given the travel restrictions experienced in 2020 and the levels of volatility in public markets, especially during the first half of 2020. We are also extremely grateful for the re-up investments from our very loyal investor base, with whom we enjoy a close partnership.”
According to Blackrock, investors from their previous Asia Property Fund IV featured heavily in this latest raise. Similar to its predecessor fund, APV will invest in value-add opportunities in Japan, Australia, Singapore, China and Hong Kong, generating returns through repositioning, rebuilding, re-leasing and recapitalizing real estate assets.
“Our strategy remains tilted towards the conservative end of the value-add spectrum to build a portfolio of cash-generating assets offering a large spread between yield and funding costs,” said Saunders. “This has proven to be a very resilient strategy during 2020, during which we have seen rent collection, occupancy levels and leasing remaining very stable and consistently strong throughout the pandemic.”
Hamish MacDonald, head of investments at BlackRock Asia Pacific Real Estate commented on the growth potential in Asia-Pacific’s real estate markets, highlighting the impact that the rise of e-commerce has had on the sector.
“Asia-Pacific real estate continues to provide both growth and diversification potential for global investors,” MacDonald said. “Asset prices have seen divergent trends across markets and sectors during the pandemic. Rapid acceleration in e-commerce services is driving up appetite for industrial and logistics assets, while the downturn in demand for office assets is presenting favourable entry points to selective markets in the region.”