The Asia-Pacific portfolio has a broad spread of investments in strong, mature real estate markets. The fundamentals in the Asia Pacific region are solid and driven by strong economic growth, urbanisation, the rise of the middle class, and increased wealth and consumption. On the back of these developments, the Asia-Pacific portfolio will grow to around €1.7 bn invested capital in 2022.
Bouwinvest manages three integrated property mandates (Asia-Pacific, North America and Europe) on behalf of bpfBOUW, the Dutch construction industry’s pension fund. We focus on strong urban locations which are easily accessible. The Asia Pacific portfolio invests in all commercial real estate sectors, as well as residential rental in Japan and China, and student housing in Australia.
It is our mission to enhance pension benefits in a responsible way by investing in sustainable real estate worldwide. Bouwinvest wants to make a direct contribution to the UN sustainability goals and we have set ourselves targets to do so. By 2025, 50% of our international real estate core portfolio (AuM) will consist of sustainable investments (GRESB 4 or 5-star rating) and by 2022, 45% of our Asia-Pacific core property portfolio should be in sustainable investments.
We make the best possible use of the expertise and experience of our local partners, or ‘operators’. Bouwinvest also opened an Asia-Pacific office in Sydney at the beginning of 2019, which allows us to optimise investment sourcing and monitoring. We invest in both listed and non-listed funds, joint ventures and club deals. Most of our portfolio focuses on long-term investments that perform steadily and have a low risk profile.
The Asia Pacific property market
The Asia Pacific market is both healthy and growing, and the demand for high quality real estate continues to increase.
We expect demand for residential rental properties will continue to increase as demand from the rising middle class outstrips supply and home ownership becomes increasingly unaffordable. There will be more focus on segments targeting international students, and one or two-person households.
The demand for more flexible office space is rising rapidly, accounting for 25% of new total take-up in 2018 in some key markets, and we expect the sector to undergo major consolidation.
The retail market in Asia-Pacific faces some challenges, with online shopping advancing at a higher rate than in the US and Europe. A growing middle class in Asia and rising wages are also boosting consumer spending. Logistics offers robust opportunities for growth in and near bigger APAC cities and large transport hubs.
‘We invest with local partners via joint ventures, club deals and real estate funds, as well as in listed real estate.’Tjarko Edzes Director Asia-Pacific Investments