Goldman Sachs plans to spend US$2 bil on property investment in Asia across real estate asset classes, including direct purchases of buildings, development opportunities and equity stakes in listed property companies. This move is likely to increase competition for assets in markets such as China and India.

The capital will be supplied from the bank's balance sheet and from real estate private equity funds managed by Goldman. For a decade now, the bank has been a prominent investor in Japanese property, but has decided to allocate funds to real estate opportunities in other parts of the region.

Kathy Matsui, Goldman Sachs Group Inc. chief strategist in Tokyo says "hedge funds are shifting Asian investments out of Japan because of lower returns and poor corporate governance in the region's biggest economy". Goldman will assign four managing directors to India and China, to be based in Hong Kong, Singapore and Mumbai, as part of its expansion in the sector.

Jean De Pourtales, Goldman's real estate global head of developing markets, said, "the [high] valuations in real estate markets are a worldwide issue. The attraction of a country such as India is that it still has tremendous long-term growth prospects." RFP