Netherlands' APG builds Asian property portfolio

Having bought its first real estate assets in the Philippines in 2009, €266 billion Netherlands pension fund APG has invested Ps2.25 billion ($50.6 million) in Manila-based Century Properties.

The deal is in keeping with APG's Asian investment strategy and its Southeast Asia focus in particular, according to Brett Gordon, Hong Kong-based head of listed real estate for Asia.

“APG has been increasing both its listed and unlisted real estate exposure across the region for a number of years now,” he says. “Currently within Asean we are particularly focused on Indonesia and the Philippines, where we foresee attractive returns can be achieved by long-term investors.”

He would not specify the kind of returns APG is expecting from the Century stake, apart from to say that they are substantially higher than might be expected from a developed market in the region.

Since 2009, the fund – Europe’s largest pension-asset manager – has made a small number of carefully selected investments in the Philippines that are performing well, adds Gordon.

Part of APG's philosophy is to build significant long-term equity relationships with listed real-estate companies, he says, then over time seek ways to build on those relationships in both listed and unlisted areas.

Century is a well-known real estate brand that celebrates its 25th year of operation in 2011, and it also has experience in property development in the US.

Jose Antonio, chairman and CEO of Century, says: “The investment by APG in Century augurs well as it is a sign of APG’s confidence in the Philippine economy over the long term, and APG’s trust in the management, track record and vision of Century.”

The deal will allow Century to capitalise on the current high growth and low inflation environment of the Philippines, adds Antonio.