LaSalle Investment Management expects to raise up to US$1bn (€880m) for its fifth pan-Asian opportunistic real estate fund.

The company said it expects to raise up to US$400m in a first close in October.

Mark Gabbay, Asia Pacific CEO at LaSalle, told IPE Real Estate that the commitments would come from existing investors.

Most are European and Middle East institutions who invested in LaSalle’s predecessor fund, Asia Opportunity IV, and were pleased with returns in the “high 30s”, he said.

Gabbay said the latest fund would be open to new investors, which are expected to come from the US and Europe, particularly from Germany.

He said institutions from Asia are also keen to gain pan-Asian exposure, with some large investors able to invest US$100m at a time.

With further marketing next year, Gabbay hopes to lift the capital raising up to US$1bn, to give the fund a purchasing power of US$3bn.

LaSalle has invested an aggregate of more than US$10bn on behalf of its LaSalle Asia Opportunity Series.

The fifth fund will aim to create a diversified portfolio, focused on income-producing assets and the development of core assets.

It will seek to take advantage of several trends, including rental growth and potential capital value appreciation over the near term.

The fund, which expects to return 18-20%, has been launched to satisfy the rising demand for core Asia assets.

He told IPE Real Estate that 60% of the fund will be invested in Australia and Japan, with the remainder allocated to Singapore, South Korea and China.

Japan, he added, is likely to offer more opportunities than Australia because of the former’s low interest rates.

“Australia is a bit tougher because there is a lot more competition and not much distress in the market,” he said.

“But we see some transactions with repositioning opportunities – buildings that might be empty or about to become empty.”

LaSalle is close completing its first deal in Australia. It has already acquired a Japanese retail asset in Osaka and is potentially looking at several other deals.

Gabbay said LaSalle had two prospective transactions In China and is also looking at a logistics asset in South Korea.