LaSalle Closes Third Asia Opportunity Fund

The LaSalle Asia Opportunity Fund III has closed with the raising of some $3 billion focused on real estate investments in the developed nations of Asia, including Japan, South Korea, Hong Kong, Singapore and mainland China. The fund was launched last year by LaSalle Investment Management, and with leverage will represent buying power of $10 billion to $12 billion. According to the company, it expects its assets under management in Asia to roughly double in the next three years, as it invests the new opportunity fund. Currently, LaSalle has about $11 billion in Asian property under management, much of which acquired by the third fund’s direct predecessor, LaSalle Asia Opportunity Fund II. The fund will not specialize in a particular property type. This is in contrast to the LaSalle Japan Logistics Fund II that the company inaugurated late last year to raise ¥90 billion ($820 million) to invest in large-scale, relatively new Japanese warehouse/distribution assets. That fund, which has leveraged buying power of about $2.4 billion to $3.3 billion, also closed recently. LaSalle sees opportunity in various parts of the Asian continent, but especially in Japan. “Among Japanese real estate, ¥490 trillion is held by corporations, about ¥68 trillion of which is considered as revenue-producing properties,” noted a June 2008 report by Jones Lang LaSalle about the Japanese commercial real estate market. “Part of the remaining real estate, which is valued at about ¥420 trillion, or more than six times of revenue-generating real estate, is likely to be simply dormant, suggesting the enormous size of the potential market.” The report further said that fully 50 percent of all direct investment in commercial real estate in the Asia Pacific region is in Japan–roughly $60 billion in 2007. Australia was a distant second with 15 percent of all direct investment (about $20 billion), while China, Hong Kong and Singapore accounted for 7 percent each.