Mitsubishi Estate intends to create a ¥2bn (€1.57bn) pan-Asian core real estate fund in four years through its new joint venture with CLSA Real Estate Partners.
The Tokyo-based real estate developer plans to invest its own balance sheet capital before turning the vehicle into an open-ended fund for third-party investors.
In February, IPE Real Estate reported that Mitsubishi Estate had given CLSA a mandate to invest in core Asia-Pacific real estate. It has now unveiled details about the joint venture with CLSA which will be called Pan Asia Realty Advisors (PARA).
Mitsubishi Estate is pursuing a similar approach in Europe, where Europa Capital – which is owned by Rockefeller Group, a subsidiary of Mitsubishi Estate – is investing its balance sheet capital in core real estate with a view to opening the strategy up to third-party investors.
The creation of PARA marks Mitsubishi’s first move into the pan-Asian, core-plus fund space, it said.
CLSA Real Estate Partners, the real estate unit of Hong Kong-based investment bank CLSA, is an established manager of pan-Asian value-added funds.
The joint venture fund will initially invest capital from Mitsubishi Estate’s balance sheet – which has a market capitalisation of ¥2.91trn – to acquire office and retail assets in Singapore and Australia.
The plan, Mitsubishi Estate said, is “to grow the warehousing vehicle, and, going forward, the initiative has plans to convert into an open-ended fund”.
Eventually, it will expand in size, geography and asset class.
Mitsubishi Estate has been expanding its global investment management platform. In 2014, it acquired US real estate fund manager TA Realty, four years after buying pan-European manager Europa Capital.