It is not often that a fund manager turns away $US400 million, but that is what Macquarie Global Property Advisors had to do, when it closed its MGP Japan Core Plus Fund over subscribed by more than $US300 million – raising $US865 million ($A1.3 billion).
MGPA’s chief executive Jim Quille said the strong demand for this fund is a reflection of investors’ appetite for continued exposure to the recovering Japanese real estate market.
“We had more than $US400 million of equity commitments from investors that we couldn’t take into this fund which parallels the experience we had when closing our global offering, MGP Fund II, in September 05.” he added.
The fund is focused on core plus real estate investments and has a targeted net return of 10-12% per annum. The fund will be investing in office, residential, retail, industrial and logistic sectors throughout the country and will have a buying power of $US2.5 billion.
The fund has commitments from 22 investors based in Australia, Switzerland, Netherlands, Sweden, Ireland, Germany, the United Kingdom and Denmark, seeking exposure to the Japanese real estate market.
MGP Japan Core Plus Fund has already successfully completed its first acquisition of a 13 property portfolio for JPY9.25 billion (approximately $US80.8 million). The portfolio consists of nine residential and four office properties located in four cities throughout Japan in greater Tokyo, greater Nagoya, Fukuoka and Hiroshima. The properties have a combined gross floor area of 27,328 sqm.
MGPA’s first global fund acquired 10 office properties in Japan and MGP Fund II, which closed in September 2005, has already acquired 13 properties in Japan, covering the office, retail and residential sectors in Greater Tokyo, Kanazawa and Sapporo.
MGPA’s Japan subsidiary managing director Ken Curtis said this is an attractive first investment for the fund providing an opportunity to acquire assets in both primary and secondary Japanese markets.
He added that the outlook for the property market in Japan remains strong on the back of a solid economic recovery and we are looking to capitalise on opportunities arising from this exciting market.
“We see demand picking up across all sectors, particularly the leasing of office and residential properties, not only in Greater Tokyo, but also major regional centres of the country. We will continue to leverage our core competency of turning acquired properties into investment grade buildings throughrefurbishment.” he concluded.
Last month, MGPA’s managing director Simon Treacy said opportunities are arising in the industrial sector because of improving market conditions and the turnaround in the Japanese economy.
“There are tremendous opportunities in the Japanese industrial property market, which has been ignored and under capitalised for the last 20 years – especially during the 1990s. So there are plenty of aged industrial stock on the market.
“However, positive market sentiments are leading corporations to invest in logistics again,” Treacy said.
Japan’s commercial property market has thrown into the spotlight in recent months, with the launch of the Rubicon Japan Trust.
In addition, Galileo Funds Management is also investigating opportunities in Japan and Mariner Financial has signed an agreement with Japan based AXA Real Estate Investment Managers.
By Nelson Yap
