ING Real Estate acquires another troubled Asian fund

ING Real Estate Investment Management Asia (ING REIM Asia) has followed up its April 2009 acquisition of the New City Asia Opportunity Fund by taking over another fund in difficulty.

Tokyo-based Creed Real Estate Partners is a $1.1 billion closed-end value-added fund focusing on office, residential and retail assets predominantly in the greater Tokyo area. ING REIM's aim is to manage out the fund and maximise the value for the investors in the fund and, in the shorter term, to renegotiate a number of the loans that are maturing.

Creed Real Estate requires stabilisation, as did the New City Asia Opportunity Fund. The latter had an original equity commitment of $772 million, has investments in China, Japan and South Korea and was renamed Phoenix Real Estate Fund after the acquisition from Tokyo-based New City Corporation.

ING REIM has had a successful stewardship of Phoenix Real Estate, says Eduard Wehry, managing director at ING REIM Asia.

"In terms of performance since ING REIM took over the management [of Phoenix Real Estate Fund], we have managed to stabilise valuations as well as the capital structure of the fund and we have made good progress in increasing occupancy in the portfolio," he tells AsianInvestor. But he would not comment on the latest valuations.

ING REIM was selected by both funds to contribute its asset-management expertise and platform. Several of the Creed Real Estate employees have joined the Dutch firm's team in Tokyo.

ING will continue to seek opportunities in Japan, says Wehry. "Japan is the largest real estate market in Asia and as such will continue to offer good opportunities," he adds, "but the market also has its challenges."

The company faces competition elsewhere in the region, with firms such as Standard Chartered and Pacific Alliance having indicated ambitions to ramp up in property investment in markets such as China and South Korea.