Veterans’ views: John Lim of ARA AM on evolving property investing
The investment industry of Asia Pacific has evolved in leaps and bounds in the 20 years since AsianInvestor began publishing. To celebrate our 20th anniversary edition we asked a set of the most experienced and senior industry veterans to describe the major changes they have seen, both in their organisations and beyond.
John Lim is one of the stalwarts of Asia's investment industry. In 2002 he set up ARA Asset Management, before taking it public in 2007, and then private again in 2017. It’s now a property investment giant with S$88 billion ($62.2 billion) under management.
Lim told AsianInvestor how Asia's investment market, and particularly real estate opportunities, have evolved in the 18 years since he first established his firm.
Q. What did the real estate industry look like in Asia when you set up ARA compared to today, and broadly how has it changed?
The biggest change in the Asia Pacific real estate markets between the early 2000s and now is that back then the region was largely a receiver of Western capital. If you look particularly at the past five years, that has changed: capital has gone out – from China, Korea, Japan – to invest in Europe and the US.
More recently, the most significant impact on the real estate market in the past five years has come from digitalisation and this year from Covid 19.
Q. How does your organisation needs to change in the coming five to 10 years to maximise its investment performance, particularly in Asia?
We have already looked at how we need to position ourselves. We changed our strategy two years ago. We looked at how the world was evolving and the impact of technology on demand and supply and we diversified into logistics, credit lending and infrastructure.
This year we have acquired a majority stake in Logos, one of the largest logistics players in Asia Pacific, with AUM of almost A$10 billion [$6.8 billion]. We also bought a majority stake in Venn Partners [a London-based specialist property lender] to move into European real estate credit.
We moved into infrastructure two years ago, taking our cue from China’s One Belt, One Road project. We are now in the process of closing our first Asean infrastructure fund [at about $1 billion].
Another big change we have made is on the technology side. We have set up a group global digital committee to roll out a so-called smart enterprise strategy. We aim to adopt big data and AI to help run our buildings more intelligently and efficiently.
Q. What do you think is the most unappreciated challenge facing institutional investors either investing into Asia or sitting within Asia?
Asian countries are not homogeneous, but most investors [outside the region] assume investing in China is no different from investing in Singapore or Hong Kong. They still don’t really appreciate the tax structure, the language, the different currencies.
There’s been improvement on that front. But if you look at the geopolitical impact,at the US-China tensions; that’s going to affect Asia Pacific as a whole.
Q. What has been your biggest regret during your career?
Like any entrepreneur setting up a business, I sacrificed time with my family during the past 20 years. But at the end of the day I look at it as a personal achievement in building this company. I would like to spend more time with my family as we enter into the next stage of our company’s development. I have two sons, the eldest is running the family office for me.
Q. What do you do in your spare time?
I enjoy golf and I collect good wine. I’m a big fan of French burgundy.