A number of funds and institutions have started to invest in residential property in Asia, as the region starts to emerge from the economic downturn.
Fortress Investment Group, the New York-based alternative asset management firm, has made “several closings” through its first dedicated Asian real estate fund since it was launched in June. The first purchase was a portfolio of 1,200 home loans in Japan, bought as part of the bankruptcy process of the Lehman Brothers’ subsidiaries. The company has already raised approximately $275 million for Asian real estate investment and has $31 billion of assets under management as of the end of the quarter.
“In these tough markets where capital is scarce, being able to start a new business in a new region for us is something we're very proud of,” said Fortress chairman and chief executive Wesley Edens. “This fund is the first that we have raised and will invest purely in Asia and will be the cornerstone of what we believe will be a very important focus of the firm in the coming months and years.”
Morgan Stanley, the US-based global financial services provider, has also revealed an investment of RMB1.25 billion ($183 million) in a large residential and commercial property project in Nanjing, China. Although the company agreed to invest in the development in 2007, the original amount of RMB370 million has now been increased, according to the president of project developer Nanjing International Group, Min Weiguo.
Global leader
Investment in Asian real estate has increased by 41% to US$12.4 billion in the second quarter of the year, according to CBRE, as reports of economic recovery across the region become more frequent. The World Trade Organisation (WTO) has said that Asia is leading the world out of recession and that the balance of economic power is shifting in favour of the region.
Source: 11th August 2009, OPP magazine