SMFL, Kenedix acquired a half stake in Lazada One through an ARA fund (Source: ARA)
With ARA Asset Management’s private funds division soon to be carved out from ESR into an independent company, the head of the new venture aims to pursue a familiar playbook focused on value-add opportunities in office, retail and hospitality in markets across Asia Pacific and beyond.
Together with Japan’s Sumitomo Mitsui Finance and Leasing Co (SMFL) and Kenedix, a 70-30 joint venture between SMFL and ARA Asset Management, Moses Song, who has been with ARA since 2009, earlier this week agreed to buy the private fund business from ESR for $270 million.
With Song set to serve as CEO of ARAvest, as the new company is called, the partners plan to relaunch the business as ARAvest and are looking to the buy, fix and sell approach which has long been ARA’s forte, as the path to regional expansion.
As he gets ready to receive the keys to the new company and its $9.8 billion in assets under management, Song on Monday told Mingtiandi that, “Value-add strategies will be the primary focus of the platform in line with our previous experience and track record. Currently, ARAvest teams are evaluating hospitality assets in Korea, Japan and the US, as well as prime office properties in APAC, where we maintain a contrarian view to current sentiment.”
Expanding a Partnership
Song will invest in ARAvest together with his new teammates, according to a joint statement on Monday, with SMFL’s Singapore-based SMFL Mirai Partners set to hold 70 percent in the joint venture, while Kenedix will own the remaining 30 percent following completion of the acquisition, which is expected early in the third quarter.
Moses Song will be leaving ESR to head ARAVest
The partners have established ARAvest, “for the purpose of maximising the synergy for both and leveraging Kenedix and ARA’s expertise of asset management in domestic/overseas, with a focus on APAC region, and financial foundation and procurement capabilities of fund of SMFL Group,” SMFL, SMFL Mirai and Kenedix said in a joint statement on Monday.
ARA Private funds currently manages 22 private vehicles, primarily focused on mainstream real estate sectors including office, retail and hospitality.
Following ARA’s existing investment thesis, Singapore, South Korea, Australia and Japan, along with select US cities, will remain key targets for ARAvest, once it is operational, Song said, while indicating that the new company intends to build on that base.
“We will pursue expansion of AUM further, generating opportunities of investment and financing for investors, and the growth of investment and financing business in APAC region by mutually demonstrating strengths of three companies more than ever through this acquisition,” SMFL said in a separate statement Monday.
ARA and SMFL had teamed up in 2020 to acquire Kenedix in a $1.3 billion buyout, with the ARAvest venture expanding that partnership.
Together with Kenedix, ARA and SMFL also partnered on two Singapore office projects, with ARA selling a half stake in the Lazada One building along Bras Basah Road to a fund backed by SMFL Mirai Partners and Kendix one year ago. The companies also invested together in the Capital Square office tower near Raffles Place.
Also in March last year an ARA-Kenedix fund acquired an industrial building in Singapore’s Jurong West area.
Familiar Faces
As Song, who had been with ARA since 2009, prepares to set up ARAvest, he will be working alongside some familiar faces, including head of real estate investments Wilson Lai.
Also joining the new firm from ARA will be senior executives in Korea, Australia, the US and Japan. Singapore-based Thomas Kong will be leading Southeast Asia for the new company with Siaw Wei Wong joining as chief financial officer.
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