BlackRock Asia Property Fund V closes at USD1.175bn
BlackRock Real Assets has raised USD1.175 billion for its BlackRock Asia Property Fund V (AFV), a value-add strategy that invests in real estate assets across Asia Pacific.
Capital raised significantly exceeds the USD1 billion target despite market uncertainty arising from the pandemic. The strong support for BlackRock’s team and capabilities comes from a diverse group of new and existing institutional investors across Europe, Asia and the Americas, comprising private pension funds, insurance companies, sovereign wealth funds, family offices and endowments. In addition, 75 per cent of clients in the predecessor fund invested again in AFV.
John Saunders, Head of BlackRock Asia Pacific Real Estate, says: “The successful fundraise demonstrates the strong confidence and trust our investors have placed in the investment capabilities and value offered by BlackRock. We are also extremely grateful for the re-up investments from our very loyal investor base, with whom we enjoy a close partnership. 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.”
He added: “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. 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.”
AFV aims to primarily generate returns from repositioning, rebuilding, re-leasing and recapitalising real estate assets, with a primary focus on Japan, Australia, Singapore, China and Hong Kong. The strategy favours off-market, defensive, multi-let, high-yielding, institutional-grade assets in growing sub-markets, with correctable impairments for repositioning through fast turnover business plans.
Hamish MacDonald, Head of Investments for BlackRock Asia Pacific Real Estate, says: “Asia Pacific real estate continues to provide both growth and diversification potential for global investors, and we are very excited about the investment window ahead of us. We benefit from on-the-ground sourcing, asset management and capital markets expertise throughout the region, and are well-positioned to identify proprietary, off-market transactions and seek favourable returns for our investors.”
He continued: “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.”
Jim Barry, CIO of BlackRock Alternatives Investors and Global Head of BlackRock Real Assets, says: “We are pleased to see such strong fundraising performance from our Asia Pacific franchise, which adds to the solid foundation of our global real estate platform. This positions us extremely well, as we seek to provide truly regional strategies which also exploit our global scale and that will allow our investors to diversify their investment options and increase allocations in private markets in this pervasively low-yield environment.”
BlackRock Real Assets encompasses the Real Estate and Infrastructure Investment units inside BlackRock Alternative Investors, providing investors with Private Real Estate Debt & Equity, Real Asset Securities and Infrastructure Debt & Equity through funds, managed accounts and co-investments. Since creation of BlackRock Real Assets in January 2016, client commitments have grown from USD25 billion to USD60 billion as of 31 December, 2020.