Data from CBRE shows that exits from property fund investments rose impressively last year.

Asian real estate funds exited a total of 310 assets last year, generating a total of $25.5 billion, a surge of 37 per cent above a five-year average level of $18.7 billion, according to CBRE, the global property business.

Fund managers were most active in Japan, with the country accounting for 51 per cent of the total assets sold via funds. Australia was the second most active market with 24 per cent of fund dispositions, followed by China with 9 per cent.

The office and retail sectors accounted for the bulk of sold assets with over 80 per cent of the disposals, the organisation said in a report.

Of the 50 funds CBRE estimated to expire in 2015 and 2016, 49 per cent extended their fund life and 24 per cent are still reviewing their exit strategies. Only 22 per cent of the funds terminated as planned, CBRE said.

“The market was only able to absorb a certain amount of fund dispositions and as a result, we’ve only seen a relatively small percentage of funds that have been able to terminate as planned. In line with our recommendations, fund managers have been strategically planning their disposition process and nearly half of the funds which were scheduled to expire in 2015-2016 are actually extending their fund life,” said Ada Choi, senior director, research, for CBRE Asia-Pacific.

“As predicted, we’ve seen fund managers disposing of the more ‘saleable’ assets in their portfolio first, particularly those situated in high liquidity markets, such as in Japan and Australia. However, assets in less liquid markets where the economic climate is more challenging and which are less profitable tend to be viewed as less attractive to buyers, and are proving more challenging to dispose of,” Choi continued.

“Our research found that at least one third of the outstanding assets to be disposed in the region remain in China and the majority of these assets - mostly in retail and hospitality - are situated in lower-tier cities. Given the subdued Chinese market fundamentals, these assets continue to face difficulty in finding buyers or in being disposed of at desirable terms. Funds that have only disposed part of their portfolios likewise may need to look at alternative approaches such as extending fund life or be more flexible on pricing,” Choi said.