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Canadian pensions raise stakes in Apac real estate
Asia Pacific now accounts for about a quarter of outbound allocations by Canadian investors, up from just 10% between 2015 and 2019, according to a June 21 report by Real Capital Analytics (RCA) – and much of that outflow has been captured in regional real estate.
This is part of an overall trend of Canadian investors diverting their attention outside North America, with around half of outbound allocations leaving the continent since 2020.
“Five of the top eight Canadian investors in the [Asia Pacific] region since 2016 [have been] pension funds. By contrast, US and European presence in Asia Pacific real estate tends to derive from a wider variety of sources, with banks, investment managers, and insurance companies among the major players,” said Benjamin Chow, head of analytics, Asia Pacific at RCA.
Established players that had been around since the global financial crisis, such as CPP Investments Board (CPPIB), and Brookfield, steadily grew their teams on the ground in the mid-2010s, according to Chow.
Canadian investors overall have been growing their exposure to Asia Pacific real estate sectors over the past few years, especially with a focus on India, China and South Korea.
As of March 31, 2021, CPPIB had C$134 billion ($109 billion) of net assets in Asia Pacific (including Japan and Australia), representing 27% of its overall assets under management (AUM).
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