August 22, 2012
The California Public Employees' Retirement System (CaIPERS) plans to invest USD 530 million in various commercial property markets across Asia.
CaIPERS will invest USD 530 million through two newly set up real estate funds targeting China, Singapore, Hong Kong and Malaysia. The fund said that it would concentrate primarily on China, but also stated that other key cities in Asia offered good opportunities.
Last week, CaIPERS announced that it would invest USD 480 million in the ARA Long Term Hold Fund which is sponsored by ARA Asset Management, part of the Cheung Kong Group.
An additional USD 50 million will also be invested in ARA's Dragon Fund II, following an earlier injection of USD 500 million into ARA Dragon Fund I in 2007.
Joe Dear, chief investment officer at CaIPERS said that income growth and urbanisation remain the key themes for growth in China. "China's office and retail sectors offer stable rental income and potential for capital value growth," he said.
ARA's Long Term Hold Fund will focus on high quality office buildings in central business districts and retail malls in well-located, densely populated suburbs in first- and second-tier cities in China and Hong Kong.
"The Dragon Fund will primarily focus on retail, office and residential property investment in key cities of China, Singapore, Hong Kong, and Malaysia," it added.
CalPERS has about USD 238 billion in assets. It administers retirement benefits for more than 1.6 million California State, local government, and public school employees, retirees, and their families on behalf of more than 3,000 public employers, and health benefits for more than 1.3 million enrollees.
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