HONG KONG—A US-based pension fund is among the heavy-hitter investors who contributed to a Pan-Asia real estate venture that closed its fund at $362.5 million.
Chelsfield Asia Fund 1, also referred to as CAF 1, will target properties that offer investors considerable value-add potential in Hong Kong, Shanghai, Singapore and Tokyo.
Chelsfield Asia Fund 1 is part of Chelsfield Asia Ltd., the Asia subsidiary of U.K.-based real estate investment, development and management firm Chelsfield Group Ltd. that has ventures worldwide. Chelsfield Group was founded by British property developers Elliott Bernerd, who is Chelsfield chairman, and Sir Stuart Lipton.
Chelsfield Group focuses on commercial, residential, hotel and leisure projects with $5.5 billion under management as of last year’s end, according to its website.
Along with the $362.5 million, Chelsfield secured a commitment for $150 million and raised an additional $366 million of co-investment commitments, bringing the total equity to $878.5 million.
Aside from the US-based pension fund, which wasn’t identified in a news release, investors in the fund include a sovereign wealth fund, a Middle East investment firm with ventures globally, an Asian corporate investor, a Hong Kong-based family office and a global fund of funds.
CAF 1 is embarking on value-add real estate investments, a strategy where buyers purchase real estate that offers them upside once they complete property improvements and upgrade building operation. This allows them to increase rents and eventually sell the renovated asset at a higher price than what the investors paid.
The economic standstill that ensued because of the coronavirus pandemic also makes now a good time to invest in real estate as assets likely are depreciating. This opens the door for even more value-add opportunities.
“The global recession provides a once-in-a-generation opportunity for investing,” Nick Loup, Chelsfield Group vice chairman and CEO of Chelsfield Asia, said in prepared remarks. “And with some cities in Asia beginning to emerge from the crisis, we are well positioned to take advantage of this cycle.”
While the first COVID-19 cases were detected in China’s city of Wuhan, the number of cases there have subsided as the diseases continued to spread in the US.
Bernerd, the Chelsfield founder and chairman, also pointed out that the current global market disruption makes now an “interesting” time to invest.
“I am delighted that we have finalized the closure of Chelsfield Asia Fund 1 and for the strong support we have had from our new investors,” Bernerd said. “This will allow us to move forward in the Asian market at an interesting time in view of everything that has been happening.”