Article date: 8 September 2008
- First daily-dealt Asia-Pacific property fund for UK retail investors
Norwich Union, part of Aviva, today announced it is to market an Asia-Pacific bricks and mortar property fund.
The Asia Pacific Property Fund will enable investors to invest for the first time in a diversified portfolio of office, industrial and retail property across Asia and Australasia. It will also hold listed real estate securities including Reits and cash.
It will be available to retail investors in the UK from 8 September 2008 direct from Norwich Union and major fund platforms. It will be available on life bonds later in the year.
The fund will be managed by Morley, the UK-based asset management arm of Aviva plc1. The manager will be Gillian Chee.
John Clougherty, managing director of retail investments at Norwich Union, said: "This is an exciting launch and the first daily-priced bricks and mortar fund available to UK retail investors that focuses solely on Asia-Pacific commercial property. The long-term prospects of the region are good; Asian economies are growing fast and account for an ever-increasing share of global economic output.
"We are committed to providing our clients with a diverse range of property funds, and this fund complements our existing offering, which includes the Norwich Property Trust, European Property Fund, and Global Property Fund.
"Asia-Pacific property provides a good opportunity for investors who want to diversify their property portfolios. It has a low correlation with other Asian asset classes such as equities and bonds, while returns from the region also have a relatively weak correlation to the UK commercial property markets.
"Morley has an excellent track record in the commercial property sector and its expertise in this area is second to none."
Nick Ridgewell, head of Asia real estate at Morley, said: "We expect the region's property markets to deliver robust returns in the coming years. There is significant economic growth in the region and property markets will benefit from this. There are large, fast-growing economies, like mainland China and India, and other countries in the region - Australia, Hong Kong and Singapore - are benefiting from increased inter-regional trade.
"There are clear diversification benefits to be derived from investing in a market as large and diverse as the Asia-Pacific commercial property market. It contains mature property markets, like Japan and Australia, and rapidly developing markets, such as China. Every country and location has its own story. By investing in a fund that holds assets in a variety of different countries, locations and sectors, there will automatically be diversification benefits."
The value of investments can go down as well as up, and you may not get back your original investment. The value of investments abroad may rise and fall due to exchange rate movements.
Investors should remember: the value of property is generally a matter of a valuer's opinion rather than fact. Investments in property can be illiquid and it may be difficult to encash at certain times.
Press office contacts:
David Gwyer 07800 693187
Jane Reynolds 0207 809 8313
Angela Warburton 07912 281502/0207 809 8614
Notes to editors:
About the Asia Pacific Property Fund (Retail share class A)
Minimum Investment: £1,000
Initial fee 5%, annual management charge 1.6%, estimated total expense ratio 2.02%, standard initial commission 3%, standard renewal commission 0.5%.
The primary investments will be direct real estate in the Asia-Pacific region, including Australasia, with the initial target markets being Japan, Singapore, Hong Kong, South Korea and Malaysia. As the fund expands, it will seek investment opportunities in less mature, more rapidly growing Asian markets, such as India and China.
About 70% of the fund will be held in real estate with the remainder held in cash and property securities.
Points to consider before entering the market
Redemptions may be deferred if they exceed 10% of the fund's value.
On average, leases in properties in much of the Asia-Pacific region tend to be shorter than in the UK. In general, this means the leases revert to a market rent more frequently than is the case in the UK. This can have advantages in allowing market rental growth to be captured, but conversely could lead to volatility in investment returns.
Unlike the UK, there are no comprehensive, universally recognised benchmarks for the Asia-Pacific region like the Investment Property Databank (IPD) indices.
Historic data suggest that returns from the commercial property market in the Asia-Pacific region are more volatile than returns from UK or continental European commercial property. Therefore, like any property investment, investment in the Asia-Pacific property market should always be seen as a long-term proposition.
The value of a property investment is generally a matter of valuers' opinion rather than fact. In addition, property investments may not always be readily saleable and occasionally there may be constraints on cashing in shares.
About Norwich Union
Norwich Union is the UK's largest insurer. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union is the UK's largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.
Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media
In the summer of 2009 Norwich Union will change its name to Aviva. Aviva is the world's fifth largest insurance group and operates in 27 countries. Aviva is to become the customer brand worldwide, thus enabling the company to compete even more effectively on a global scale for the benefit of customers, staff, business partners and shareholders.
Morley is the UK-based asset management business of Aviva plc. Firms within the Morley group of companies manage £157bn (€198bn) from offices around the world as at 31 March 2008.
Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Morley name. The property team manages in excess of £29bn (€37bn) of UK and European property assets.
On 28 March 2008, Aviva plc announced it was combining its asset management businesses to create a single, globally integrated asset manager to be known as Aviva Investors - to be launched formally in September 2008.
Aviva Investors will be the global asset management business of Aviva plc, the world's fifth-largest insurer. Firms that will become Aviva Investors have £316 billion ($623 billion) of assets under management as at 28 February 2008 and significant growth potential.
Operating under a single brand with more than 1,300 employees in 15 countries across the UK, Europe, North America and Asia, and subject to regulatory approval, Aviva Investors will combine businesses in the UK (Morley Fund Management), North America (Aviva Capital Management, MFM International, Aviva Investment Canada), France (Aviva Gestion d'Actifs), Australia (Portfolio Partners), Poland (CUIM Polska), Ireland (Hibernian Investment Managers), Spain (Aviva Gestion SGIIC (Gestora)) and Romania (CertInvest) and work in partnership with Delta Lloyd Asset Management in the Netherlands.