APREA launches real estate report on Asian pension funds

The Asia Pacific Real Estate Association (APREA), a non-profit industry association promoting and representing the real estate sector on a regional basis, has announced that it launched a major real estate report on the dynamic and increasingly important area of real estate in Asian pension funds.

The report was conducted by Professor Graeme Newell of the University of Western Sydney. Professor Newell has been involved in property education and property research for more than 30 years and has an active property research agenda in Asia.

“Major demographic changes in Asia will see Asian pension funds reassessing their current conservative asset allocations. Increased levels of real estate in their portfolios offer an important asset class for Asian pension funds to achieve portfolio diversification and meet their significantly increasing future liabilities in an effective risk-adjusted manner,” said Professor Newell.

The report highlights the increasing pressures on Asian pension funds to meet future liabilities with their ageing population and typically conservative asset allocations, as well as emphasized the potential added-value role of property sector in the pension funds.

The report also deals with the important issues including the effective strategies for increasing property allocation, the current under-allocation of property among Asian pension funds, the significantly increasing importance of real estate, and the increasing exposure of Asian pension funds in the real estate market.

Professor Newell’s report was conducted under the supervision of a governance committee comprising investment consultants and APREA-member investors. It involves several surveys from major Asian pension funds, as well as interviews with leading industrial personalities.

“Professor Newell’s research is an extremely important addition to our understanding of this dynamic industry. This paper has significant implications for pension funds and all areas of the real estate industry in Asia as pension funds in Asia need to strategically assess the increasingly important role and benefit of real estate as an asset class,” said Peter Mitchell, chief executive of APREA.