In Quest for Growth, Netherlands Pension Manager to Up Asian Property Investment

(August 18, 2010) — Algemene Pensioen Groep NV, which manages about $321 billion for Netherland’s largest pension fund, said it plans to profit from Asia’s booming economic growth by upping its real estate allocation in the region by $1.3 billion over the span of three to five years.

Currently, the Netherlands-based asset manager has $5.1 billion of real-estate assets in Asia.

APG aims to invest in residential properties in emerging markets, including China and India, while increasing its allocation in Asia from 21% to 24% of assets in the next three- to five-year period. The International Monetary Fund has reported that economic growth in China and India will expand 10.5% and 9.4% this year respectively.

Approximately 80% of APG’s real-estate investment in Asia is allocated to developed countries, including Japan, Australia, Hong Kong, Singapore and Korea, Global Pensions reported.

While APG sees value in many developed Asian markets, such as its growing interest in retail and logistical properties in Australia, the fund is cautious about the future profitability of others, notably Japan. “We are currently bearish about further investment in Japan due to the economic climate and relatively low property yields,” Daan Van Aert, head of strategic real estate at APG Investment Asia, a subsidiary of APG, told Global Pensions. “We don’t see attractive market opportunities at the moment to expand further.”