UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number

811-22007

 

 

RMR ASIA REAL ESTATE FUND

(Exact name of registrant as specified in charter)

 

400 CENTRE STREET
NEWTON, MASSACHUSETTS

 

02458

(Address of principal executive offices)

 

(Zip code)

 

Adam D. Portnoy, President
RMR Asia Real Estate Fund
400 Centre Street
Newton, Massachusetts 02458

(Name and address of agent for service)

 

Copy to:

Brian D. O’Sullivan
State Street Bank and Trust Company
 801 Pennsylvania Avenue, Tower II, 4 th Floor
Kansas City, Missouri 64102

Elizabeth Watson, Esq.
State Street Bank and Trust Company
 2 Avenue De Lafayette, 6 th Floor
Boston, Massachusetts 02111

 

Registrant's telephone number, including area code:

(617) 332-9530

 

 

Date of fiscal year end:

December 31

 

 

 

 

Date of reporting period:

March 31, 2008

 

 


 

RMR Asia Real Estate Fund

Portfolio of Investments – March 31, 2008 (unaudited)

 

Company

 

Shares

 

Value

 

Common Stocks – 96.0%

 

 

 

 

 

Hong Kong – 44.1%

 

 

 

 

 

Diversified – 25.2%

 

 

 

 

 

Agile Property Holdings, Ltd.

 

1,235,000

 

$

1,299,641

 

China Overseas Land & Investment, Ltd.

 

310,000

 

565,617

 

China Resources Land, Ltd.

 

1,015,000

 

1,760,647

 

Guangzhou R&F Properties Co., Ltd., Class H

 

220,000

 

578,081

 

Henderson Land Development Co., Ltd.

 

333,000

 

2,364,008

 

Hongkong Land Holdings, Ltd.

 

985,000

 

4,068,050

 

Hysan Development Co., Ltd.

 

1,122,000

 

3,128,420

 

Kerry Properties, Ltd.

 

90,000

 

543,517

 

KWG Property Holding, Ltd.

 

1,060,000

 

896,199

 

New World China Land, Ltd.

 

1,092,000

 

693,142

 

Shun TAK Holdings, Ltd.

 

585,000

 

774,222

 

SPG Land Holdings, Ltd. (a)

 

800,000

 

333,048

 

The Wharf (Holdings), Ltd.

 

170,000

 

801,655

 

 

 

 

 

17,806,247

 

Hospitality – 12.7%

 

 

 

 

 

Regal Real Estate Investment Trust *

 

2,500,000

 

578,209

 

Sun Hung Kai Properties, Ltd.

 

543,000

 

8,407,355

 

 

 

 

 

8,985,564

 

Office – 0.3%

 

 

 

 

 

Champion Real Estate Investment Trust *

 

490,000

 

250,583

 

Retail – 5.9%

 

 

 

 

 

Hang Lung Properties, Ltd.

 

1,174,000

 

4,155,873

 

Total Hong Kong (Cost $32,605,435)

 

 

 

31,198,267

 

Japan – 37.3%

 

 

 

 

 

Diversified – 27.9%

 

 

 

 

 

Aeon Mall Co., Ltd.

 

61,000

 

1,692,064

 

Mitsubishi Estate Co., Ltd.

 

375,500

 

9,116,272

 

Mitsui Fudosan Co., Ltd.

 

220,000

 

4,367,777

 

Shoei Co., Ltd.

 

76,960

 

958,912

 

Sumitomo Realty & Development Co., Ltd.

 

202,000

 

3,560,534

 

 

 

 

 

19,695,559

 

Office – 9.4%

 

 

 

 

 

Japan Excellent, Inc. *

 

50

 

305,478

 

Japan Real Estate Investment Corp. *

 

35

 

407,303

 

Nippon Building Fund, Inc. *

 

210

 

2,654,494

 

NTT Urban Development Corp.

 

1,200

 

1,721,509

 

Orix REIT, Inc. *

 

80

 

465,490

 

Tokyu REIT, Inc. *

 

145

 

1,090,991

 

 

 

 

 

6,645,265

 

Total Japan (Cost $36,657,436)

 

 

 

26,340,824

 

Malaysia – 2.0%

 

 

 

 

 

Diversified – 2.0%

 

 

 

 

 

KLCC Property Holdings Berhad

 

770,000

 

702,955

 

SP Setia Berhad

 

600,000

 

697,827

 

 

 

 

 

1,400,782

 

Total Malaysia (Cost $1,909,378)

 

 

 

1,400,782

 

Philippines – 2.2%

 

 

 

 

 

Diversified – 2.2%

 

 

 

 

 

Filinvest Land, Inc.

 

20,500,000

 

510,414

 

Megaworld Corp.

 

17,963,000

 

1,057,912

 

 

 

 

 

1,568,326

 

Total Philippines (Cost $2,518,367)

 

 

 

1,568,326

 

 

See notes to portfolio of investments.

 


 

Company

 

Shares

 

Value

 

Common Stocks – continued

 

 

 

 

 

Singapore – 10.4%

 

 

 

 

 

Diversified – 10.4%

 

 

 

 

 

Allgreen Properties, Ltd.

 

1,650,000

 

$

1,474,445

 

Ascendas India Trust *

 

464,000

 

350,583

 

Ascendas Real Estate Investment Trust *

 

645,000

 

1,115,260

 

Capitaland, Ltd.

 

330,000

 

1,522,395

 

CDL Hospitality Trusts *

 

1,050,000

 

1,579,062

 

City Developments, Ltd.

 

52,000

 

416,317

 

SC Global Developments, Ltd.

 

171,000

 

166,472

 

Singapore Land, Ltd.

 

60,000

 

296,415

 

Yanlord Land Group, Ltd.

 

260,000

 

402,339

 

 

 

 

 

7,323,288

 

Total Singapore (Cost $8,224,385)

 

 

 

7,323,288

 

Total Common Stocks (Cost $81,915,001)

 

 

 

67,831,487

 

Warrants – 2.3%

 

 

 

 

 

India – 2.3%

 

 

 

 

 

Ansal Properties & Infrastructure, Ltd., Macquarie Bank, Ltd., expiring 1/17/12 (a)

 

93,000

 

357,120

 

Unitech, Ltd., Macquarie Bank, Ltd., expiring 6/24/08 (a)

 

180,000

 

1,238,400

 

Total India (Cost $1,821,137)

 

 

 

1,595,520

 

Total Warrants (Cost $1,821,137)

 

 

 

1,595,520

 

Short-Term Investments – 1.6%

 

 

 

 

 

Other Investment Companies – 1.6%

 

 

 

 

 

Dreyfus Cash Management, Institutional Shares, 3.32% (b) (Cost $1,148,282)

 

1,148,282

 

1,148,282

 

Total Investments – 99.9% (Cost $84,884,420) (c)

 

 

 

70,575,289

 

Other assets less liabilities – 0.1%

 

 

 

66,540

 

Net Assets – 100%

 

 

 

$

70,641,829

 

 

Notes to Portfolio of Investments

*

 

Company is organized as a real estate investment trust as defined by the laws of its country of domicile.

(a)

 

As of March 31, 2008, this security had not paid a distribution.

(b)

 

Rate reflects 7 day yield as of March 31, 2008.

(c)

 

The gross unrealized appreciation and gross unrealized depreciation of the Fund’s investments for federal income tax purposes, as of March 31, 2008, are as follows:

 

Cost

 

$

84,884,420

 

 

 

 

 

Gross unrealized appreciation

 

$

2,189,360

 

 

 

 

 

Gross unrealized depreciation

 

(16,498,491

)

 

 

 

 

Net unrealized depreciation

 

$

(14,309,131

)

 


 

Information regarding FAS 157

 

The Fund has adopted the provisions of Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements, or FAS 157, effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. FAS 157 established a three tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three tier hierarchy of inputs is summarized in the three broad levels listed below.

 

·                   Level 1 – quoted prices in active markets for identical investments

·                   Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates,  credit risk, etc.)

·                   Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

 

The valuation techniques used by the Fund to measure fair value during the three months ended March 31, 2008, maximized the use of observable inputs and minimized the use of unobservable inputs. When the S&P 500 Index fluctuates significantly from the previous day close, we believe that the closing price in the local market may no longer represent the fair value of foreign securities at the time of the U.S. market close. Accordingly, in such circumstances, we report holdings in such foreign securities at their fair values as determined by an independent security pricing service. The service uses a multi-factor model that includes such information as the issue’s local closing price, relevant general and sector indices, currency fluctuations, depository receipts, and futures, as applicable. The model generates an adjustment factor for each security that is applied to the local closing price to adjust it for post closing events, resulting in the security’s reported fair value.

 

The following is a summary of the inputs used as of March 31, 2008, in valuing the Fund’s investments carried at value:

 

Valuation Inputs

 

Investments in
Securities

 

Level 1 - Quoted prices

 

$

1,148,282

 

Level 2 - Other significant observable inputs

 

69,427007

 

Level 3 – Significant unobservable inputs

 

—

 

Total

 

$

70,575,289

 

 

There were no investments in securities characterized as Level 3 on December 31, 2007, or March 31, 2008.

 


 

Item 2.  Controls and Procedures.

 

(a)  The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)), are effective, as of a date within 90 days of the filing date of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 

(b)  There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3. Exhibits.

 

(a)(1) Certification of Principal Executive Officer, as required by Rule 30a-2(a) under the 1940 Act.

(a)(2) Certification of Principal Financial Officer, as required by Rule 30a-2(a) under the 1940 Act.

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

RMR ASIA REAL ESTATE FUND

 

By:

/s/ Adam D. Portnoy

 

 

Adam D. Portnoy

 

President

 

 

Date:

May 27, 2008

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

By:

/s/ Adam D. Portnoy

 

 

Adam D. Portnoy

 

 

President

 

 

 

 

Date:

May 27, 2008

 

 

 

 

 

 

 

By:

/s/ Mark L. Kleifges

 

 

Mark L. Kleifges

 

 

Treasurer

 

 

 

 

Date:

May 27, 2008

 

 

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