LaSalle Launches Real Estate Fund in Japan

The private open-ended core real estate fund started with six assets and $560 million of equity commitments from Japanese investors.
Keith Fujii, CEO, LaSalle Japan. Image courtesy of LaSalle Investment Management

Citing Japan’s strong market fundamentals, LaSalle Investment Management has launched LaSalle Japan Property Fund, a private open-ended core real estate fund seeded with $560 million of initial equity commitments from Japanese investors and loans extended by major Japanese financial institutions.

The fund, which will focus on diversified assets across the office, industrial, retail and multifamily sectors in the cities of Tokyo, Osaka, Nagoya and Fukuoka, has six assets in its initial portfolio. The assets were chosen based on LaSalle’s research and strategy framework of Demographic, Technology and Urbanization (DTU). The goal is to grow the fund to $1.8 billion in assets in three years and $2.7 billion in five years. While the first closing had investments from Japanese investors, LaSalle plans to target capital from international investors in the future and offer them access to a suite of products comprised of a diverse range of real estate investments.

READ ALSO: LaSalle Expands Korean Industrial Footprint

Mark Gabbay, CEO, LaSalle, Asia Pacific. Image courtesy of LaSalle Investment Management

Mark Gabbay, CEO, LaSalle, Asia Pacific, noted in prepared remarks that the initial portfolio’s high asset quality has the potential to generate strong recurring cash flows. He added that the desirable locations also align with the vehicle’s investment parameters and advances global and Asia Pacific regional strategies targeting core assets with stable income generation.

The creation of the fund follows the launch of the publicly traded J-REIT, LaSalle Logiport REIT, in 2016, according to Keith Fujii, CEO, LaSalle Japan. He said in a prepared statement the new fund enhances the firm’s products with core investment strategies in Japan. Fujii also pointed to the team’s strong track record of transactional execution, leasing, asset management and investment performance in the Japanese market.

Ryota Morioka, fund manager for LaSalle Japan Property Fund. Image courtesy of LaSalle Investment Management

In addition to strong market fundamentals, Ryota Morioka, fund manager for LaSalle Japan Property Fund, said transparent capital markets, depth of existing stock and high barriers-to-entry provide a compelling strategy for core real estate investments in the current environment.

LaSalle’s Global Presence

LaSalle managed about $68.4 billion of assets in private and public real estate assets around the globe during the first quarter of 2019.  Last week, the firm’s core Canadian real estate fund along with three partners acquired Edmonton City Centre, a 1.4 million-square-foot mixed-use asset in downtown Edmonton, Alberta, from Oxford Properties Group. The property includes the Edmonton City Centre retail component, four parking facilities and three office towers in the city’s CBD.

In October, LaSalle expanded its South Korean holdings with the purchase and lease-up of Logiport West Anseong, an industrial property in Anseong City, South Korea. The four-story building has more than 500,000 square feet of space with areas for dry storage, temperature-controlled storage and office space. As of that deal’s closing LaSalle said it owned $3.9 billion in industrial assets across the Asia-Pacific market.