APG focuses on developed Asia real estate, selective in emerging markets

Since mid-November 2025, Brian Hung has served as Head of APG’s Asia Pacific Real Estate team. Now that he has been in the role for several months, we asked him about his priorities and the opportunities and challenges he sees for real estate investing in the region.

The Global Real Estate team is completing implementation of APG’s refreshed real estate mandate. The mandate places more emphasis on core and core‑plus strategies and long‑term partnerships, with a smaller portion reserved for opportunistic and value‑add investments. Overall, the strategy has become more risk‑averse, focusing on Asian Pacific developed markets such as Japan, South Korea, Singapore, Australia, and Hong Kong, which offer institutional‑grade product depth, robust asset stock, and sufficient liquidity for scaled deployment. The updated mandate reflects APG Asset Management’s shift to serving only its largest pension‑fund client, ABP.

What are your main strategic priorities for the first 12–18 months?
“For the next 12 months, my top priority is to ensure we are deeply client focused and fully aligned with what the client has asked us to execute under the new mandate. I also want to close certain gaps in our portfolio. For example, we are currently underweight in offices across the region. There were good reasons for that historically, but we need to reassess whether those reasons still apply. We believe there will be a broader recovery in the office sector, and our recent transaction with Hongkong Land in Singapore reflects that view. The living sector is another area where we have exposure, but not enough, particularly in Japan. That is something I want to advance.

A second priority is to thoroughly and more frequently review hold‑sell decisions across the listed and private portfolios. Some positions we will continue to hold. Others we would like to exit but cannot yet. And there are assets where we could take advantage of current liquidity. In each case, we must determine whether to wait or to exit while we have the opportunity.”

Asia is expected to account for 40% of global GDP by 2040 and host 55% of the world’s workforce. How does this structural growth affect APG’s allocation decisions?
“Each year we develop an investment plan with APG’s Global Real Estate Executive Committee together with our Research & Analytics team. That plan includes regional allocations, guided by top‑down macroeconomic views and long‑term megatrends such as urbanization, technological advancement, demographic shifts, and the sharing economy. We combine these insights with country‑level risk assessments and geopolitical considerations to determine the appropriate allocation range. Currently, we are slightly underweight our funding allocation range, so in 2026 Asia will receive a somewhat larger investment budget.

Given the region’s working‑age population and long‑term growth drivers, I expect that our allocation could increase over time. The limitation, however, is that emerging markets such as China and India are not current priorities for us, which reduces the size of our investable universe.”

How do you balance scaled deployment in large, liquid markets with selective exposure to high‑conviction opportunities in emerging economies?
“Emerging markets remain part of the mandate, but we will be very selective in China and India. In China, we see attractive value today because pricing has corrected significantly. We also have a sizable existing portfolio there, which we are actively recycling. When assets no longer fit our hold‑sell criteria, we pursue disposal. But we are not selling everything. Some logistics assets, for example, are strategically located and will remain long‑term holds. Selectivity is key in emerging markets.”

How has APG’s approach to China evolved?
“Around two years ago, we introduced an allocation cap to China. That was sensible, given heightened geopolitical risk, something affecting all institutional investors and particularly North American ones. Their retreat has reduced market liquidity.

China’s macroeconomic environment has also become more challenging and growth has slowed. Our approach, however, is different from investors who are exiting the market entirely and accepting steep discounts. We are more strategic. We aim to continue holding high‑quality assets and, long term, we believe APG should remain invested in China. You simply cannot disengage from a market of that scale.

APG has maintained a local real‑estate presence in Asia for nearly two decades. What does this enable you to do that offshore investors typically cannot?
“Local presence allows us to stay close to market dynamics and identify emerging opportunities or risks early. It also enables us to closely monitor and work with our partners. Over nearly two decades, we have built a strong market reputation, not only by investing at scale, but also by acting with agility and a long‑term mindset.

Even under the new, more focused mandate, our partnership‑driven approach remains an advantage. We are selective rather than spreading commitments across many managers. This clarity helps partners bring us high‑quality opportunities.”

Can you share two or three partnerships that best illustrate APG’s approach in Asia?
“One example is our partnership with Hongkong Land. We spent more than a year developing the relationship. Because we have teams in both Hong Kong and Singapore, we stayed close to the market and helped shape the fund from the ground up. As a founding shareholder, we helped ensure the structure matched our client’s requirements, including leverage limits, development restrictions, and an open‑ended format. Without local presence, we would have received a pre‑packaged product instead of the ability to co‑create it.

A second example is our long‑term partnership with The Living Company, formerly Scape. We have invested in the operating company and in multiple asset‑level ventures over more than a decade. During that time, we helped shape the company’s growth, provided underwriting perspectives, and advised on sectors and regions to target. While we rely on our partners’ on‑the‑ground expertise, we contribute regional and global insights, including ESG.

In Asia, we are actively involved in responsible investing. We push for higher reporting standards, design requirements, and construction practices than many peers. We help partners understand global best practices and the minimum standards they should meet. APG aims for all its real estate assets to be green building certified, with a target of having at least 50% of the portfolio certified by 2030. This requirement, along with several other responsible investment criteria, is typically embedded in the legal documentation of private market real estate investments at inception and is then closely monitored throughout the life of the investment.

This approach is reflected in APG’s pan-Asia data center venture (ESR DC), which is required to achieve green building certification for all developments. Several assets are currently under development and are being assessed against the globally recognised LEED standard. One asset in Japan recently achieved LEED Gold, with only a 0.5% increase in construction costs, making it one of the first data centers in Japan to obtain this certification.”

What do global peers still misunderstand about the Asia‑Pacific real‑estate landscape?
“First, Asia Pacific is extremely diverse. Different currencies, governments, and regulatory systems make it impossible to apply a single investment lens. In that regard, the United States as a whole is effectively one market with a single government and currency. Europe is more varied, but still more collectively aligned than Asia. Second, underwriting risk properly requires local insight, especially in emerging markets where risks are often underestimated. A lot of the long‑term growth will continue to come from Asia Pacific. Investors need the right allocation and positioning to capitalize on that growth.”