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Asian funds underexposed to property

Raquel Pichardo-Allison Global Pensions
Asian funds underexposed to property - Asian Property - property funds - Analysis

ASIA – Asian pension funds should invest more in real estate if they want to bring in enough returns to meet their liabilities, a new report shows.

Research by the University of Western Sydney and commissioned by the Asia Pacific Real Estate Association (APREA) says Asian pension funds should try to emulate their European and US counterparts and increase their holdings in property.

Globally, pension funds allocate $750bn in real estate with allocations ranging from 7% to 10% of their overall portfolios. In contrast, allocations by Asian pension funds do not represent a significant percentage, APREA said.

In Japan, for example, 35% of pension funds invest in real estate, but the average allocation is only 1.2%. In South Korea however, the allocation to real estate has skyrocketed from 1% to 10% in only the past 10 months.


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