Former Chief Executive of Asia Pacific Real Estate Association and Non-Executive Director of Emerge Capital Peter Mitchell said the trend of further foreign investment in Australian commercial property was likely to increase.
"I think this is happening because since the GFC investors have become more risk averse so they are favouring more mature markets and for Asia-based investors that means Australia," Mr Mitchell said.
"There has definitely been a notable shift in risk aversion and Australia rates very highly."
He said while there was clearly a lot of money coming in from Chinese groups such as the China Investment Corporation (which bought a $2.45 billion collection of office towers from Investa two years ago), there would also be a new surge of investment from other Asian countries such as Japan and Korea.
"We will soon see a greater spread from Asia and south-east Asia." Read More
WITH ¥500 trillion (approximately US$4.4 trillion), Japanese investors are a significant source of capital for investment into Australian real estate, according to AMP Capital.
Investors from Japan are primed to play a key funding role and the Japanese institutional investment environment is undergoing a transformation.
AMP Capital’s report, Generational Shift Sees Japanese Investors Flock to Real Assets, found Japan’s demographic profile as an ageing society combined with their desire for yield to fund retirement means direct real estate represents a compelling proposition for many Japanese investors.
When compared to Japan’s Government Bonds, local and international real estate is attractive on a relative income yield basis.
The opportunity for Japanese pension funds to allocate 5% to alternatives potentially means approximately US$230 billion worth of capital could be directed to direct real estate over the long term. Read More
"Advisory group, Emerge Capital Partners has been advising many interested investors in this space in Australia and says Australia's first build-to-rent, in the current cycle, is likely to emerge in the next 12 to 24 months.
Interestingly, it was potential settlement risks faced by many apartment builders which has also given the sector a kick-start.
Managing partner Tim Frogley says many developers currently building tall towers for onselling – concerned with settlement issues and the breaching of sunset clauses – are considering converting their towers into build-to-rent apartments.
Associate Director John Fitzsimons says with settlement risk tailwinds, developers are now seriously considering taking short-term profits, opting for the more attractive long-term cash flows afforded by apartment rentals.
Emerge says the government does not need to intervene to make the sector work, although tax concessions and faster planning systems will allow the sector to take off faster, the same as any housing industry." Read More
A European healthcare fund backed by Asian and Australian institutional investors has made its first investment.
ECP European Healthcare Real Estate has acquired a portfolio of seven aged-care properties in and around Graz in Austria for approximately €50m.
Emerge Capital Partners, which runs the fund, said the transaction represented the cornerstone investment.
The company is hoping to eventually raise €250m of equity for the fund and will begin talking to European pension funds and institutional investors over the next three months. Read More
Specialist healthcare real estate fund manager makes first acquisition in Europe.
ECP European Healthcare Real Estate (Luxembourg) SARL has made its first acquisition of a portfolio of 7 aged care real estate assets in and around Graz, Austria, for c. €50 million. The seed portfolio has a WALE of 24 years and presents a very stable long dated income stream. The transaction is the cornerstone investment in a targeted €500 million European Healthcare Real Estate Fund focusing on healthcare real estate assets in the key European markets of Germany, Belgium, Luxembourg, Switzerland and Austria and is managed by ECP Fund Management.
Source: Property Management 2017 Feb
Emerge Capital Partners have been centrally involved in managing the capital partner process and seeing the joint venture negotiations through to financial close. Read More
Mitsubishi Estate and Ping An Real Estate to fund Lendlease $1.5 billion project
On 22nd December 2016, the major Australian property group Lendlease announced that construction of Sydney's tallest office building will be funded by Chinese financial conglomerate Ping An Real Estate and Japan's biggest property company, Mitsubishi Estate, after Lendlease secured their backing for the $1.5 billion Circular Quay Tower project. Read More