Friday, August 19, 2005

Carlyle to invest in Asia property

Carlyle to invest in Asia property

By Dominic Whiting, Asia property correspondent
Thursday, August 18, 2005; 2:09 AM

HONG KONG (Reuters) - U.S. private equity firm The Carlyle Group will invest in around $1.5 billion of property in China, Japan and South Korea, the manager of the company's first Asian real estate fund said on Thursday.
The fund, which will borrow heavily to bolster $410 million of equity recently raised from investors such as pension funds and private banks, is keen on Chinese shopping centers and housing, and offices in Japanese cities and Seoul.
Carlyle's managing director for Asia real estate, Jason Lee, told Reuters the fund would soon sign a deal with a Chinese developer to build middle-class homes in Beijing, despite government efforts to cool a housing boom.
Measures including a capital gains tax to curb speculation and mortgage rate rises have hit the Shanghai property market hard since May, slowing transactions to around a third of the previous level and slashing some apartment prices by 20 percent.
"Everyone's concerned about overheating, especially in the luxury market in Shanghai. We're cautious as well," Lee said, declining to give details of the planned partnership.
But every major city in China had different property market characteristics. "And even within cities you have different dynamics in each asset class," Lee said.
Carlyle is also looking to build or buy shopping centers in Shanghai and Beijing, to cash in on an influx of foreign retailers that has gathered pace since last December when China eased investment rules for the industry.
A host of property investors are thinking along the same lines, with Singapore's CapitaLand Ltd. and Australia's Macquarie Bank snapping up shopping centers this year, and U.S. firms Taubman Centers Inc. and Simon Property Group on the prowl.
"It's a race to team up with foreign operators in particular," said Lee, referring to firms such as Wal-Mart Stores Inc., which is setting up 10-15 new stores this year.
Carlyle, which runs Asian venture capital and leveraged buy-out funds, has so far dabbled in pure real estate investment in Asia, buying a 900,000 sq ft Japanese warehouse complex, a 14-storey office in a Tokyo satellite town, and two 20-storey offices in Seoul.
In Japan, the new fund is looking beyond central Tokyo for offices, to Osaka and Fukuoka, because prices in the capital have been rising fast.
"We're in the midst of putting together a strategic partnership on the retail side," Lee said. "And for office, we're looking at sub markets of Tokyo and other cities with good demographics."
Lee said the Seoul office market was still attractive, with yields of 8-9 percent, despite a flow of domestic capital into property that has raised prices.
"You still have rental growth. There's virtually no new supply," Lee said, adding that Carlyle also wanted to diversify into residential and retail property in South Korea.
International investors were gaining enthusiasm for property in Asia, Lee said, as China's economic growth rates of around 9 percent, and trade growth of around 30 percent, spurs the region's economies.
"People feel comfortable that one way to play the Asia growth story is to get into real estate," he said.
Lee said the Carlyle fund could venture outside its three core markets of China, Japan and South Korea if the right deal were offered. He had received several proposals from India, where foreign property investment rules were eased in February.
"I can't say we will invest in any significant way with this first fund," Lee said. "But hopefully, when we move onto the fund number two, India will be a market that we pursue."

(c) 2005 Reuters

2005/08/19, , 日経金融新聞, 1ページ,  , 717文字



Post a Comment

<< Home