Nonlisted real estate retains its appeal for investors globally, with another US$160.2 billion raised this past year, according to the ANREV/INREV/NCREIF Capital Raising Survey 2018 (see chart, page 36). The Asia Pacific region saw a record US$26.2 billion raised, 70.9 percent of which was for nonlisted real estate funds.

Although diversification is often the main reason for institutional investors to invest in Asia Pacific real estate, they are also showing an increased propensity to chase riskier strategies. With returns on nonlisted property funds at their highest level since the global financial crisis, investors are increasingly favouring value-added strategies as the most attractive risk-and-return prospect for the year.

This has led to a surge in popularity in value-added strategies, which have, to some extent, supplanted core investment as the preferred strategy to generate returns in the eyes of investors in nonlisted products. Opportunistic plays are