LaSalle raises US$1 billion equity to invest in Asian real estate
16 July 2014 -LaSalle Investment Management today announces it has raised US$1 billion of equity since the beginning of 2014 for its Asia investment strategies.
The amount raised, which will provide buying power for approximately US$3 billion worth of assets, comprises the final close for the LaSalle Asia Opportunity Fund IV (LAOF IV) and two other separate account mandates. The final close for LAOF IV secured total commitments of US$485 million plus US$100 million of co-investment capital for China logistics deals.
Over the past 12 months, 24 private equity funds targeting Asia Pacific have raised an aggregate of US$9.3 billion, according to Preqin. Of those funds US$3.3 billion exclusively target China, while another US$3.2 billion are regional funds which include a China allocation. The high proportion to China indicates investors anticipate attractive buying opportunities in that market.
LAOF IV is the fourth in a series of successful opportunity funds launched by LaSalle for the Asia-Pacific region, focused on building a diversified portfolio of assets in Australia, China, Japan and South Korea. Investors in the fund include sovereign wealth and pension funds from the United States, the Middle East and Europe, including Illinois Teachers Retirement System, San Diego City Employees’ Retirement System and Arkansas Teachers Retirement System.
The investment strategies for the two separate account mandates will focus on income producing assets in Japan and Australia that require active asset management plans. These “value-add” strategies are targeting total gross returns in the mid-teens with a significant portion of the returns coming from current, in-place cash flow.
Mark Gabbay, Co-Chief Executive Officer, Asia-Pacific at LaSalle, commented, “LaSalle’s current fund raise is testimony to the firm’s successful track record and deep experience in property investment in Asia-Pacific with an emphasis on asset enhancement and the strength of LaSalle’s global client base.”
LaSalle sees attractive investment opportunities in income producing assets in Japan, logistics assets and special situations in Korea, retail and urban for-sale residential developments in Australia, and the development of logistics assets in Tier 1 and Tier 2 cities in mainland China.”
“Global investors continue to see the potential of investing in Asia-Pacific and are generally under-allocated to real estate in the region. What is interesting about this particular capital raise is that some international investors are recognizing that Asian income producing assets can provide stable returns and are pursuing real estate investment strategies with reduced risk premia for the region,” added Jon Zehner, Global Head of the Client Capital Group at LaSalle.
LaSalle was established in 2000 in Asia and currently manages US$4.8 billion in Asia Pacific property assets. Since 2002, it has completed more than US$14 billion of acquisitions and US$8 billion of dispositions in the region.