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Tuesday, June 10, 2014

Fund manager spends US$200m on properties in Japan, Australia

http://www.scmp.com/property/international/article/1528635/fund-manager-spends-us200m-properties-japan-australia

Fund manager spends US$200m on properties in Japan, Australia

 

 

 

 

 

 

 

 

 

M&G Real Estate, one of the world’s top 25 real estate fund managers by assets under management, has acquired two properties in Japan and one in Australia with a combined market value of over US$200 million.

The move comes as an increasing number of Western funds become more active in the Asia-Pacific region.
The company said it made the purchases with a view to building long-term sustainable income and diversify its core Asia real estate portfolio.
Fund manager Erle Spratt said the acquisitions add distinct value to the firm’s Asia-Pacific property portfolio as it continues to diversify risk and build upon the attractive investment performance this strategy has achieved on a one- and three-year basis.
M&G Real Estate is the real estate fund management arm of M&G, which is the investment unit of Britain-based Prudential.
“We are constructing a portfolio in Japan comprising two-thirds income-oriented assets and one-third growth investments to deliver attractive income and capital growth from our Japanese portfolio,” Spratt said.
“We see a healthy pipeline of opportunities to invest in Japan that fit this strategy.”
Peter MacColl, global head of capital markets at international property consultancy Knight Frank, said: “We are seeing groups in Europe and the US becoming a little more active in the region, although this is not necessarily being translated into deals and volumes at this point.
Purchasing property in the Asia-Pacific region is buying into the continued growth story and maybe a diversification strategy
Peter MacColl, Knight Frank
“Purchasing property in the Asia-Pacific region is buying into the continued growth story and maybe a diversification strategy.”
Japan was becoming increasingly attractive, although it was not easy to execute deals at the moment, MacColl said.
He said China would undoubtedly become an important investment destination as the market continues to liberalise and open up.
Asked whether investors would prefer Japan to China, MacColl said the occupier markets (in which property is held for leasing) in Japan were improving, and the low cost of debt and a weakened yen made Japan relatively attractive – although there was a lot of competition from local capital.
“In China, there is not a huge amount of liquidity given the size of the market, and occupier markets have weakened slightly,” he said.
“Whether one is favoured or another really depends on the investment strategy of the group.”

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