LaSalle Investment Management and PRUPIM have announced on behalf of the Asia Property Fund three new acquisitions representing a gross investment of more than $1.4 billion. The assets are prime office and retail properties located in Tokyo, Singapore and Melbourne and mark an important first step in the fund's strategy to build a pan-Asia portfolio of core assets. The Asia Property Fund was launched in December 2006 and is co-sponsored by PRUPIM and LaSalle Investment Management and is open to institutional investors and pension schemes. Following completion of these acquisitions, the fund will have gross assets in excess of $2 billion diversified across eight core assets in five countries and three sectors.
Marc Montanus, Regional Director at LaSalle, said, "These assets add considerable diversity to the fund, broadening our country exposure and deepening our asset and tenant diversification. By adding offices in Singapore and Tokyo, we're positioned to capture very strong growth in these markets in the next two to three years. The joint venture with Westfield in Australia provides our investors with access to a super-regional shopping centre in one of Melbourne's most affluent suburbs in partnership with a strong operator whose interests are fully aligned with those of our investors."
Trevor Hankin, CIO for PRUPIM Singapore, said, "These acquisitions bring the size of the Fund to $2 billion, a tremendous achievement within such a short time. These purchases complement the portfolio's existing exposure to the Australian, Singapore, Hong Kong and Korean markets and reflect our continued commitment to offer institutional investors and pension schemes a truly diversified exposure to Asia Pacific property."
Westfield Doncaster, Melbourne, Australia
Asia Property Fund has acquired a 50% interest in Westfield Doncaster, a major shopping centre the Westfield Group is redeveloping and expanding. Upon completion, the centre will be a multi-level super regional centre in the affluent eastern quadrant of Melbourne and will include more than 460 tenants over an area of more than 120,000 m². Tenants include major retailers such as Myer and David Jones department stores, Coles, Safeway and Kmart. In addition to the retail space, the centre will include an entertainment and leisure precinct. Average lease terms will vary from five years for specialty tenants to longer than 20 years for the anchor tenants. Super-regional shopping centres offer a powerful combination of stability and growth and the investment is viewed as a core component of the portfolio. The Fund's interests are fully aligned with those of Westfield, who will retain a 50% interest in the property as well the leasing and management after completion.
Tennoz First Tower, Shinagawa-ward, Tokyo, Japan
Tennoz First Tower is a 26-story, A-grade multi-tenant office building comprising more than 46,500 m² of space. The property is located minutes from Tennoz station and leased to a diverse base of more than 30 Japanese tenants including Panasonic. As an A-grade property in a submarket with vacancy rates close to 1% and strong demand for office space, this property is positioned to capture attractive future rental growth. The fund is also expected to benefit in the near term as rents at the property are currently substantially below market levels.
Prudential Tower, Singapore
Ideally located in the central business district of Singapore, Prudential Tower is a 30-storey, Agrade office tower fully leased to a range of credit tenants. The Fund has acquired floors 20-25, which comprise 67,000 ft² of lettable area leased to 13 tenants. Similar to Tennoz, the property's location and quality position it to capture very strong market growth in the near term as vacancy rates for A-grade offices are estimated at less than 1% in Singapore. Additionally, there is significant potential for the Fund to realise immediate value by increasing the existing rents to much higher market levels. Prudential Tower is near Raffles Place, the financial heart of