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APN Property: Asian capital flows a two way street

  • Published August 28, 2015 2:14PM UTC
  • Publisher Wholesale Investor
  • Categories Company Updates

28th August 2015, APN Property Group

You only need to look around Melbourne’s skyline to see the influx of Asian capital into Australia with multiple high rise and high density residential towers being completed or approved. One of these offerings, developed by Singaporean group Hiap is Australia 108.On completion Australia 108 will be Melbourne’s tallest building eclipsing Eureka tower by 25 metres, and according to CBRE is over 80% sold to buyers based in China and South East Asia.

Attend most home auctions in the inner Eastern suburbs particularly around leading high schools and you are likely to find the marketing spiel produced in both English and Mandarin with Feng Shui commentaries even available on some properties. China Investment Corporation’s recent victory over local rivals for the$3.1 billion1 Investa office portfolio shows the appetite is not limited to residential property, with a number of Chinese institutions setting up offices in Sydney and Melbourne to provide them with a local platform from which to deploy capital into Australia.

Based on all of this you would be forgiven for thinking it is one way traffic as far as the direction of capital flows into property.

However, recent and not so recent initiatives increasingly shed light on the Australia Asia partnership with growing opportunities being accessed in both southerly and northerly directions.

Platinum Capital is the most recent Australian firm to establish businesses or products to enable Australian investors to access Asian property and other opportunities which are gaining in appeal as investors look to Asia for its attractive growth profile (particularly relative to domestic economic trajectory), rapidly establishing markets, better than expected governance and appealing investment returns. Overlay the recent normalisation of the Australian dollar and the returns have been impressive.

APN’s Asian REIT Fund has delivered 19.53% total return per annum since inception2 and is the only way investors can access Asian listed commercial property through a dedicated strategy in Australia. The fund has been insulated from recent volatility in Chinese equities markets (which have fallen approximately 30%) with the fund returns flat over past months reflecting its real asset backing through a portfolio of underlying institutional grade office, retail and industrial properties. The fund is unhedged and offers investors daily liquidity and a running yield of circa 5%.

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