Norwich Union (NU) has launched an Asia Pacific fund investing in office, industrial and retail property across Asia and Australasia.
The Asia Pacific Property fund, launched last week, is managed by Morley, the British-based asset management arm of Aviva, which also owns Norwich Union.
In addition to direct property the fund also invests in property securities, including real estate investment trusts (Reits). Gillian Chee, investment director at Morley, manages the fund. She has more than 16 years’ asset management experience.
According to Chee (pictured) there are strong diversification benefits to be found in the Asia-Pacific commercial property market.
“Other parts of the world are on the brink of recession,” says Chee. “It’s a financial meltdown globally. The EIU [Economist Intelligence Unit] four-year GDP forecast for Asia as a whole is 4.7%, compared with Europe at 1.6% and North America at 1.8%. Asian economies will be spearheading the growth.”
The Asia Pacific Property fund, which was seeded with £105m at launch, is mainly invested in direct property, which accounts for about 70% of the portfolio. About 20% is invested in listed property securities, while the remaining 10% is held in cash.
In terms of country allocation, about 90% of the fund is invested in Singapore, Japan, and Hong Kong. The rest of the portfolio, about 10%, is invested in Australia and Malaysia.
Chee says the fund will concentrate on the more developed markets over the next three years, after which it will diversify into other countries such as China, South Korea and Taiwan.
“It’s about demand,” she says. “With increasing wealth there will be increasing consumption.
“The [Asia Pacific] real estate market will definitely benefit from the GDP growth it is experiencing. We look at trends in the economy as well as the property cycle.”
“In Singapore there is a shortage of grade A office buildings, as well as [in] Hong Kong and Japan. In the longer run we will be diversifying outside these three countries.”
The minimum Investment in the Asia Pacific Property fund is £1,000. . Morley will change its name to Aviva on September 29, while NU will change to Aviva next summer.