LaSalle Investment Management, owned by the world’s second-largest property broker, is seeking to raise as much as $700 million for an Asia-Pacific property fund, according to two people familiar with the matter.
The unit of Chicago-based Jones Lang LaSalle Inc. (JLL:US) has already purchased an industrial asset in China and an office property in Japan to seed the new Asia Opportunity Fund IV, said the people, who declined to be identified as they’re not authorized to discuss the plans. The fund will seek industrial properties and hotels in Australia and China, retail properties in Australia, industrial assets and offices in Japan, and higher-return housing in select cities in China, they said.
Asian economies will expand by about 6 percent in 2012, a similar rate to last year, the International Monetary Fund forecast in April. Investments in Asia-Pacific commercial property increased by a record 13 percent in 2011, helping the region overtake North America to become the world’s second largest, a report from property broker DTZ in April showed.
“Long term, we’re big believers in the Asian growth story,” said Louis Christopher, managing director at SQM Research Pty in Sydney. “But the industrial property market in Australia has been patchy, house prices in China have been falling and Japanese office returns are tied to economic growth. This is very much about taking a bottom up approach and picking the best individual assets and the best regions within Asia.”
LaSalle Investment is also raising money for a third Japan logistics fund after selling the assets from a previous vehicle to Singapore-based Global Logistic Properties Ltd. (GLP), one of the people said. Stephanie Murphy, global corporate communications director at LaSalle, declined to comment.
Rising consumption across Asia will boost demand for retail properties in the region from investors, CBRE Group Inc. (CBG:US) said in its first-quarter Asia-Pacific MarketView report. Shortage of space and retailer demand will boost growth of industrial properties in China, Hong Kong and Australia.
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