MGPA to raise new $1 billion-plus Japan fund

By Eriko Amaha

SINGAPORE (Reuters) - MGPA, a private equity real estate investment firm 49 percent owned by top Australian investment bank Macquarie Group (MQG.AX: Quote, Profile, Research, Stock Buzz), plans to raise a new Japan fund worth more than $1 billion to grasp opportunities in logistics and other sectors.

"For Japan Core Plus, we've got Fund I there now and Fund II is on the horizon," Simon Treacy, chief executive for MGPA in Asia, said at the Reuters Global Real Estate Summit in Singapore on Monday.

"It will be very large. In Fund I, we've got 100 billion yen of the equity. So the Fund II should be a multiple of that."

MGPA has been active in Japan, snapping up office and retail assets.

Treacy said offices in Osaka and Tokyo are attractive, while the industrial sector is also a targetted sector given a lack of modern and efficient distribution facilities.

"We have invested in logistics (in Japan) which we think regionally is probably our number one choice," he said.

"There has been no industrial development for the last 14-15 years since the (economic) bubble burst. It's only been the last two to three years where modern logistics facilities are coming onto the market."

Investment yields on Grade A office buildings in central Tokyo stood at 3.2 percent in March, unchanged from a year earlier, while capital values have risen 17 percent in that time, according to Jones Lang LaSalle.

Many analysts believe the Tokyo office market is probably peaking, but property consultants say capital values should hold steady for the next 12 months.

MGPA's first Japan core fund has currently about $1 billion in assets under management.

Separately, Treacy said MGPA would allocate 25 percent of its new $3.9 billion Asia fund in China, 30 percent in Japan and 25 to 30 percent in Singapore.

Last week, MGPA announced that it had raised a $3.9 billion fund to invest in Asia and the fund will have $15.6 billion of spending power with borrowing.

OPPORTUNITIES AROUND

MGPA was also active in Singapore, becoming one of the biggest investors there last year.

Its acquisitions included two land parcels at Marina View, which it bought last December for about S$3 billion through the Urban Redevelopment Authority land sale, and Temasek Tower. In the last 18 months, MGPA has invested $5.5 billion in Singapore.  Continued...