Global private equity firm The Carlyle Group and S.O.W. Inc., a real estate management and securitization consulting firm, today announced their joint venture to create a geographically diverse portfolio of mid-sized retail properties in non-metropolitan areas across Japan. The partners seek to accumulate more than 10 assets in the portfolio with a value of as much as €230 million (30 billion yen).
The joint venture has already invested approximately €70 million (8 billion yen) to acquire two mid-sized shopping centers Power Center Otsu (Otsu City, Shiga) and LOC Town Odate-Nishi (Odate City, Akita). Both of these assets currently deliver stable rental income and enjoy good market positions. The joint venture seeks to enhance the value of the properties by improving their management, attracting quality tenants and growing customer traffic.
Toru Abe, President of S.O.W., said, Our strategic partnership with Carlyle enables us to build an attractive portfolio of retail assets across the country. Carlyles keen focus on yield enhancement together with our industry knowledge will create tremendous value for the assets.
Rio Minami, Managing Director and Head of Carlyles Japan Real Estate team, said, We have established a competitive force in Japans retail property market by combining Carlyles track record of US$10 billion global real estate investments with S.O.W.s property management skills and strong connections with local financial institutions.
Jason H. Lee, Managing Director and Head of Carlyles Asia Real Estate group, added, An underlying theme of Carlyles Asia real estate strategy is a focus on working with local strategic partners to help source attractive opportunities. This strategy has proven to be successful for us and we believe our partnership with S.O.W. will deliver similar results.
Carlyles Asia Real Estate group is leading the effort in this joint venture. The group invests in a broad range of properties, including office, residential, industrial, retail and health care facilities in Japan, China and South Korea. Last July, it established Carlyle Asia Real Estate Partners, a US$410 million real estate fund, which may invest in approximately US$1.5 billion worth of real estate in Asia.
S.O.W. provides consulting on real estate management and securitization. S.O.W. consultants have extensive experience in real estate management and have strong relations with major commercial banks and securities firms, local financial institutions, and retail operators.