US-based real estate investment firm LaSalle Investment Management has secured $1.15 billion of equity for its fifth pan-Asia opportunistic fund, topping the initial target of $750 million as global institutional investors pile into the region’s property assets.
The capital will provide buying power for around $3.3 billion worth of assets, according to a statement by the firm. The closed-end vehicle, LaSalle Asia Opportunity V (LAO V), has already invested some 37 percent of the committed capital in deals across major Asian cities including Japan’s Tokyo, Osaka, and Nagoya; eastern China’s Shanghai and Hangzhou; and Singapore.
LAO V’s diversified portfolio covers office, retail, hotel/serviced apartment and logistics investments. The capital was raised from a roster of 20 external institutional investors based in Asia, the Middle East and the US, and 85 percent of the total commitments are assigned to the fund while 15 percent is earmarked for co-investments.
LaSalle Asia Opportunity V Taps Thirst for Value-Add Opportunities
This latest milestone comes after LaSalle IM has invested an aggregate of $11 billion across more than 150 property deals under its Asia Opportunity Series. The independent subsidiary of global real estate consultancy JLL has about $59 billion of global assets under management, including private and public equity and private debt investments.
LAO V will target mispriced real estate assets with opportunities for value-add repositioning and redevelopment efforts. Target markets include Australia, mainland China, Hong Kong, Japan, South Korea and Singapore.
“Investors are drawn to this region for its healthy market fundamentals, risk-return diversification opportunities afforded by varying market cycles, and the rising demand for core assets,” commented Mark Gabbay, LaSalle’s chief executive and chief investment officer for Asia Pacific in a statement.
“The robust global investor demand for LaSalle’s opportunistic fund product in the region highlights not just Asia Pacific’s emergence as one of the most attractive destinations for real estate investors globally, but also our investors’ confidence in LaSalle’s excellent record in deploying capital and generating strong investment performance for our clients,” he added.
Previous Fund Notched IRR of Over 39%
LAO V was launched in August 2016 as a successor to LaSalle Asia Opportunity Fund IV (LAOF IV), which has committed $585 million with a similar strategy and risk profile. The predecessor fund has returned 89 percent of the equity deployed, according to LaSalle, and has enjoyed a 39.1 percent internal rate of return from its inception through the first quarter of 2018.
LaSalle announced in August of last year that it was boosting the fundraising target for LAO V to $1 billion after securing $335 million in commitments. Earlier this month, LaSalle said it had scooped up Shanghai International Plaza, a 31-storey, grade A commercial tower in mainland China’s financial hub, on behalf of LAO V.
The tower was sold by a vehicle of Singaporean fund manager Alpha Investment Partners, after the parties signed the sale and purchase agreement in January. LaSalle has also opened logistics properties in China and Korea under its Asia Opportunity Series.