Admiral Investment eyes niche property market in Asia

12 December 2013   Category: News, Asia, Hong Kong, Japan   By Hui Ching-hoo

Newly formed Hong Kong-based asset manager Admiral Investment is aiming to position itself as a specialist in the niche REITs and property market in Asia, according to Victor Yeung, chief investment officer of the firm.

The company, officially launched in November this year, will leverage its expertise in real estate to launch a flagship REIT fund early next year, he says. It will also team up with Japanese real estate entity Real Capital to pursue property investments in Tokyo.

“We will target the local property projects with valuations of less than 5 billion yen (US$48.5 million) because the market lacks asset managers with investment experience in small-size property projects,” says Mr. Yeung. “Our outlook for Asia property remains positive, with rental returns holding moderate. We do not expect an abrupt end to quantitative easing in the US. The US Fed desires continuity in its monetary policies, judging from its recent messages and the appointment of Janet Yellen as the next chairman.”

He goes on to say that its flagship fund will have an 80% weighting in Asian REITs and will place the remaining 20% in property stocks and fixed income.

“We believe that smaller en bloc buildings in Japan can generate alpha over the next five years,” Mr. Yeung says. “In our REIT account, we overweight Hong Kong and Singapore REITs for the first half of 2014, as current REIT prices have priced in some of the potential corrections in direct real estate.”

Mr. Yeung says the fund is raising AUM via institutional investors from the Asia Pacific region: “The company preliminarily focusses on property investment. Over the longer term, however, it intends to build up a platform with a variety of fund options.”