Key Takeaways
- • PAG Real Assets closed its PAG Real Estate Partners Fund III (PREP III) at $1.8 billion, marking the largest Asia-Pacific core-plus/value-add real estate fund raised in 2023 according to Preqin data.
- • PREP III targets office assets and select multi-family properties across six key gateway cities: Auckland, Hong Kong, Seoul, Singapore, Sydney, and Tokyo, leveraging PAG's demonstrated regional track record.
- • The fund is already deploying capital opportunistically, including a recent Sydney office acquisition executed at a 17 percent discount, positioning the strategy to capitalize on current market dislocations in revalued office sectors.
- • Broderick Storie, co-head of PAG's real assets division, emphasized that current conditions across Asia-Pacific markets are generating a strong investment pipeline, validating the firm's core-plus/value-add approach in the office sector.
- • The $1.8 billion close represents a significant fundraising achievement in a challenging year for real estate capital deployment, reflecting institutional confidence in PAG's regional expertise and market timing amid office sector headwinds.
Summary
PAG Real Assets announced the final close of its PAG Real Estate Partners Fund III (PREP III) at $1.8 billion on August 8, 2023, establishing it as the largest Asia-Pacific core-plus/value-add real estate vehicle raised during the year. The fund represents the third iteration of PAG's dedicated core-plus/value-add strategy and underscores the firm's commitment to exploiting market dislocations within the regional office sector, a focus area as properties undergo significant revaluation globally.
The fund's investment mandate centers on office assets with selective exposure to multi-family properties across six strategically selected Asia-Pacific gateway markets where PAG has established operational capabilities: Auckland, Hong Kong, Seoul, Singapore, Sydney, and Tokyo. This geographic concentration reflects the firm's approach to leveraging local market expertise while maintaining disciplined asset selection across differentiated regional conditions.
PREP III has already commenced active deployment, with management citing a recent Sydney office acquisition closed at a 17 percent markdown as evidence of attractive entry points emerging across the region. Broderick Storie, partner and co-head of PAG's real assets division, characterized the current environment as opportunity-rich, noting that "current conditions in the region are creating a strong pipeline of opportunities for our local teams." Storie further emphasized that the successful close validates PAG's investment thesis, stating, "We see this fundraising as a validation of our successful approach to investing in real assets in the region, particularly in the office sector which is our focus."
The $1.8 billion close in a challenging fundraising environment reflects institutional investor confidence in PAG's regional positioning and market timing strategy. The fund's core-plus/value-add mandate targets risk-adjusted returns through opportunistic acquisition and value creation across its target markets, positioning limited partners to benefit from the ongoing office sector repricing cycle anticipated to extend across Asia-Pacific.
The fund's investment mandate centers on office assets with selective exposure to multi-family properties across six strategically selected Asia-Pacific gateway markets where PAG has established operational capabilities: Auckland, Hong Kong, Seoul, Singapore, Sydney, and Tokyo. This geographic concentration reflects the firm's approach to leveraging local market expertise while maintaining disciplined asset selection across differentiated regional conditions.
PREP III has already commenced active deployment, with management citing a recent Sydney office acquisition closed at a 17 percent markdown as evidence of attractive entry points emerging across the region. Broderick Storie, partner and co-head of PAG's real assets division, characterized the current environment as opportunity-rich, noting that "current conditions in the region are creating a strong pipeline of opportunities for our local teams." Storie further emphasized that the successful close validates PAG's investment thesis, stating, "We see this fundraising as a validation of our successful approach to investing in real assets in the region, particularly in the office sector which is our focus."
The $1.8 billion close in a challenging fundraising environment reflects institutional investor confidence in PAG's regional positioning and market timing strategy. The fund's core-plus/value-add mandate targets risk-adjusted returns through opportunistic acquisition and value creation across its target markets, positioning limited partners to benefit from the ongoing office sector repricing cycle anticipated to extend across Asia-Pacific.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.