Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
The main sources of the $3 billion were US public and corporate pension funds; US endowments and foundations; European corporate pension funds; European funds of funds, insurance companies, and money managers; and sovereign wealth funds from the Middle East and Asia.
LaSalleÆs latest fund was launched in 2007 and is an opportunistic fund that will focus on investing in Japan, Korea, Hong Kong, Singapore and China. The fund will seek to acquire, reposition, develop and redevelop assets. The fund will invest in all property types. Predecessor funds include LaSalle Asia Recovery, launched in 2002 and currently disinvesting, and LaSalle Asia Opportunity Fund II, launched in 2005, and is currently managing assets.
Demand for real estate investments is on the rise and La Salle expects its assets under management in Asia to double in the next three years from the current $11 billion as the firmÆs funds become invested.
La Salle believes strong fundamentals and above-trend economic growth continue to support a positive outlook for the Asian real estate sector
ôAsia remains a key strategic priority for our business and we have a very active plan to grow our operations in the region,ö says Philip Ling, managing director at LaSalle Investment Management.
The amounts raised by La SalleÆs most recent two funds underscore the commitment of existing and new investors to real estate investments in Asia, Ling says.
In late-2007, LaSalle Investment Management closed its LaSalle Japan Logistics Fund II, which raised Ñ90 billion ($820 million), with a total buying power of Ñ260 billion to Ñ360 billion ($2.4 billion to $3.3 billion) including leverage. That fund was launched in 2007 and is an opportunistic fund currently investing capital. It focuses on investment opportunities in industrial properties across Japan and is second in this series of funds. Its predecessor, Japan Logistics Fund, launched in 2004 and is currently managing assets.
La Salle sees a lot of opportunity in Japan, which contains 50% of the total value of real estate assets in Asia, Korea, China and elsewhere in Asia-Pacific.
ôWe will continue investing in large scale, modern warehouses in Japan (through the LaSalle Japan Logistics Fund II) as we believe this sector offers a lot of potential, with highly efficient warehouses still comprising a very small proportion of the overall storage market,ö Ling says.
LaSalle Investment Management, which is part of the Jones Lang LaSalle group, has $54.1 billion in assets under management worldwide. It is active across a range of real estate capital and operating markets including private and public, debt and equity.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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