It was the year that Apple’s iPhone 4 was launched but Uber and Netflix had yet to arrive. It was also the year that APN launched the Asian REIT Fund. A decade has passed since then, which makes it 10 years of the Fund’s growth in assets, and 10 years of working hard and consistently delivering the track record of performance we are so proud of today.
Back in 2011, APN was the first to market with a REIT Fund focused in the Asian region. We launched the APN Asian REIT Fund with a strategy that mirrored APN’s highly successful and flagship Australian REIT Fund.
The rationale was to concentrate on APN’s 20-plus years property-for-income philosophy; a robust, time-tested approach that delivers a stable, monthly income at lower-than-market risk by focussing on property market fundamentals. With a decade now under our belts, it’s clear that the Asian REIT Fund strategy has worked.
The performance and track record speaks for itself. The annualised return since the Fund’s inception is a robust 12.29%p.a.1, with lower-than-market volatility. The current yield of 5.35%2 is also appealing. From the get-go, this Fund has delivered on its stated objectives.
We believe it will continue to do so. In fact, we’re expecting the next decade in the life of the Fund to be even better than the first.
The Asian region remains one of the best structural growth stories globally. Despite a few bumps in the road with the vaccine rollout and virus resurgence, the IMF still expects Asian growth to exceed that in the rest of the world.
With nearly two-thirds of the global middle class located in Asia, this shouldn’t be surprising. The growth in consumer demand, and hence economic activity, over the coming years will be huge. The implications for physical real estate demand are equally significant3.
The Asian REIT Fund was launched to capitalise on this growth by investing in the key Asian gateway cities of Singapore, Tokyo and Hong Kong. These global cities appeal to us because they’re magnets for global capital flows and investment. We also appreciate the impact on long term returns of location, demographic advantages and land shortages in these markets. All are constrained by their geography.
The market for Asian REITs is also expanding. The first Asian REIT was listed in Japan in 2001. The Asian REIT sector now has a combined market capitalisation in excess of A$300 billion, more than twice the Australian REIT market. With China and India recently launching their REIT sectors, it is patently clear that the future size of the Asian REIT market will be many multiples of what it is today, dwarfing its Australian counterpart.
Over the last decade, Australian advisors have become more alert to the merits of the Asian REIT opportunity. Our investors have enjoyed the returns and are coming back for more.
But this is not a time for self-congratulation. The opportunities in the region are expanding and there are an ever-greater number of REITs to put under the microscope. We’re working hard to ensure the next decade is even better than the last.
The APN Asian REIT Fund enables investors to add diversification to a property investment portfolio in the world’s fastest-growing region, in cities where land is geographically constrained. With an attractive running yield of 5.35%2 generated in the world’s fastest growing region, we believe the next 10 years of the Asian REIT Fund will be even bigger and better.