Phoenix Property Investors Closes $1.2B Fund

The private equity group closed its third Asian real estate fund at a level significantly exceeding its $900 million target.
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Phoenix Property Investors, of Hong Kong and other locations, has closed its Phoenix Asia Real Estate Investments VI fund. The announcement came from Monument Group, of Boston, which advised Phoenix on the fund-raise.

READ ALSO: Angelo Gordon Raises $1.3B for Asia Fund

Fund VI closed at $1.2 billion in commitments, including dedicated co-investment pools, well exceeding its $900 million target. The fund’s investor base reportedly includes leading institutional limited partners such as endowments and foundations, pension plans and sovereign wealth funds across Asia, North America, Europe and the Middle East.

In a prepared statement, Benjamin Lee, a managing partner of Phoenix, stated that the private equity real estate investment group has so far committed to 17 investments from Fund VI, totaling about $424 million. In addition to Fund VI, Monument Group advised Phoenix on its two predecessor Asia real estate funds, Fund IV ($460 million, closed in 2010) and Fund V ($750 million, closed in 2013).

Since 2002, Phoenix has invested in the residential, retail and office markets across 15 first-tier Asian cities, through offices in Hong Kong, Tokyo, Seoul, Shanghai, Singapore, Sydney and Taipei. As of press time, Phoenix had not responded to Commercial Property Executive’s request for additional information.

Too much capital?

One of the sections in a 2019 Asia-Pacific outlook from PwC and the Urban Land Institute is titled “Big Money Chases Slow Growth,” an indication that this vast region is perhaps not out of line with the Western world. Large Asian institutional investors have become more comfortable with real estate as an investment class, leading to a situation in which massive quantities of capital are propelling the market up, but without investors expecting much if any rental growth.

The outlook suggests that even in the event of a downturn, prices might fall less than transaction volume, “given the huge amounts of liquidity currently in circulation,” the report states. As one of Asia’s top cities, Singapore has been seeing ample activity. In October, Angelo Gordon and TCRE Partners paid $396 million for a fully occupied 250,000-square-foot office building in the Bugis Junction development.