GLOBAL - National Australia Bank's asset management arm, nabInvest, has acquired a 35% stake in a leading global asset manager, giving the bank access to property markets around the world including Europe and India.
The acquisition of New York-based AREA Property Partners ends a long hunt for a leading real estate investment manager to strengthen the Australian bank's investment capabilities.
The bank has not disclosed how much it paid for the stake.
Garry Mulcahy, chief executive at nabInvest, said: "For some time, we have been looking to partner with a top-tier global real estate investment manager to build out our investment capabilities."
He pointed out that the deal recognises the importance of real-estate investment in the company's overall asset allocation.
US commercial property market prices are on an upward trend. The MIT Commercial Property Price index showed a 12% gain in the fourth quarter of 2010 and 19% for all of 2010, according to the MIT Centre for Real Estate.
Both of these were second highest in history, surpassed only by the second quarter 2005 and 2005 as a whole.
After acquisition, AREA's management will remain unchanged, though three National Australia Bank representatives will join AREA's eight-member board.
AREA chairman William Mack and global chief Lee Neibert will continue to run the business.
Since its founding in 1993, AREA's funds have invested in more than 500 transactions in the US, Europe and India with an aggregate value of $60bn (€43bn).
National Australia Bank, the country's fourth largest bank, has strong distribution channels in Australia and New Zealand, which represents the world's fourth largest asset management market, with roughly $1trn in assets under management.
For AREA, the strategic partnership is expected to help AREA diversify its operations and beef up its product offerings in international markets.
Headquartered in New York, the firm has offices in Atlanta, Los Angeles, San Francisco, London, Paris, Luxembourg and Mumbai.
AREA's funds target a broad range of opportunistic, value-added and debt investments in real estate assets throughout North America, Europe, and India.