Firm of the Year
2 LOGOS Property Group
Blackstone’s opportunistic fundraising success in Asia is unparalleled, but the New York-headquartered asset management giant widened the gap between itself and the competition even further last year. In October, the firm raised over $5 billion in the first close for Blackstone Real Estate Partners Asia II. The pan-Asia opportunistic vehicle was understood to have been officially launched only four months earlier.
The first closing amount for the vehicle was the same as what its predecessor fund – BREP Asia – cumulatively raised in December 2014. And the signs are that Blackstone will meaningfully out-raise its maiden effort. If the firm is successful in raising BREP Asia II’s $7 billion hard-cap amount, it will be among the world’s biggest private real estate funds.
In 2017, the firm also continued its creative approach to finding opportunistic transactions in the region by pursuing two privatization deals in Japan, which included the buyout offer for Croesus Retail Trust and a takeover of Astro Japan Property Group.
Industry Figure of the Year
1 Lee Kok Sun, GIC
2 Joseph Gagnon, Warburg Pincus
3 Lim Ming Yan, CapitaLand
As chief investment officer for real estate at Singapore’s sovereign fund, one of the most active investors in the region, Lee Kok Sun took ambitious strides in Asia in 2017 across countries and investment strategies. GIC has been investing in India for many years but 2017 saw the investor make its biggest ever outlay in the country. GIC acquired a one-third stake in Indian property developer DLF’s rental unit arm for 89 billion rupees ($1.3 billion; €1.1 billion). Kok Sun also recognized the growing investment potential in Japan’s hotel sector, on the back of rising inbound visitors and acquired the Sheraton Grande Tokyo Bay hotel through a joint partnership.
An industry veteran, Kok Sun has been with GIC for over two decades and took on the real estate CIO mantle in June 2016. But it was not all about outlays. Another standout deal last year was his successful steering of GIC’s exit from its long-time investment in the logistics powerhouse Global Logistic Properties last year.
Deal of the Year, Asia
1 GLP privatization
2 CapitaLand’s purchase of Asia Square Tower 2
3 ARA Asset Management’s privatization
Singapore-listed logistics powerhouse Global Logistic Properties’ privatization process, which began in November 2016 and ended last summer, has been one of the largest M&A deals in Asia’s industrial sector in recent years. It was also among the most-talked about takeovers, particularly in terms of its highly-contested bidding process.
Ultimately, a consortium of investors, including GLP’s chief executive Ming Mei and China’s Vanke Group, acquired the global logistics operator at a cash consideration of S$3.38 ($2.58; €2.07) per share, beating competitor e-Shang Redwood, which was the second highest bidder. The transaction resulted in GLP being valued at approximately S$16 billion on any equity value basis, in addition to marking an exit for Singaporean investor GIC’s majority stake in GLP.
GLP’s takeover process was significant to a great degree because of the massive scale of its operations. Nesta Investment Holdings, the company comprising the investor consortium, has taken control of over 600 million square feet of logistics space across China, Japan, US and Brazil, as well as a successful funds management platform.
Institutional Investor of the Year
2 Allianz Real Estate
3 Ivanhoe Cambridge
The pre-eminent Singapore state fund was part of some of the biggest deals in Asia’s private real estate markets last year, including making sizeable investments in Japan and India. In July, the investor agreed to the privatization of Global Logistic Properties, the global logistics powerhouse in which GIC owned a 36.8 percent stake. The firm came under the control of a consortium comprising Hillhouse Capital, GLP’s chief executive Ming Mei, and others, over six months after GIC requested GLP to undertake a strategic review of its business.
GIC also made its biggest bet in India to date when it agreed to acquire a 33.3 percent stake in Indian property developer DLF’s rental arm for 89 billion rupees ($1.3 billion; €1.1 billion) in August. The deal was pegged to be the biggest ever foreign direct investment in Indian real estate, and further solidified GIC’s presence in the country. Meanwhile, in Japan, GIC partnered with a Japanese REIT to acquire the Sheraton Grande Tokyo Bay hotel for $909 million.
Capital Raise of the Year
1 Gateway Real Estate Fund V
2 Real Estate Partners Asia II
3 LOGOS South-East Asia
Gaw Capital Partners beat its own fundraising record last year, steering one of the largest opportunistic capital raises in Asia-Pacific in 2017. In April, the Hong Kong-headquartered firm raised $1.3 billion for its fifth Asian opportunity fund, Gateway Real Estate Fund V, in addition to raising $500 million in sidecar commitments from investors. The capital haul for its latest vehicle surpassed the $1.02 billion raised for Fund IV in late 2013.
The final closing for Fund V followed a $700 million first close in April 2016 and a second on $890 million in August. The firm had originally set a higher $1.5 billion target for the closed-ended vehicle, but eventually lowered the number after conversations with investors revealed the growing preference for co-investment sidecars. In the same year, Gaw also succeeded in investing a sizeable chunk of the fund and co-investment capital, when it led a consortium of investors to acquire Hong Kong-listed property company LinkREIT’s portfolio of shopping centers for HK$23 billion ($2.95 billion; €2.49 billion).
Capital Advisory Firm of the Year
1 Macquarie Capital
3 Park Hill
Macquarie Capital’s backing of the LOGOS Group, the pan-Asia logistics specialist, was one of the biggest highlights for the firm in 2017. Macquarie successfully led the Sydney-headquartered LOGOS to enter a number of new markets in Asia-Pacific, with commitments from some of the world’s largest institutional investors. In October, LOGOS was part of the first wave of global logistics operators to debut in India to take advantage of booming e-commerce and investor-friendly reforms.
With commitments from Canadian investors Ivanhoé Cambridge and QuadReal Property Group, and set up in partnership with the Indian developer Assetz Property Group, the LOGOS India Logistics Venture has up to $800 million in investment capacity. In the same month, LOGOS also brought in Denmark’s PFA Pension as a co-investor in its China logistics venture alongside Ivanhoe Cambridge. Growth markets were LOGOS’s focus in 2017, and the firm also went on to make a foray into Indonesia through a partnership with the Canada Pension Plan Investment Board and Ivanhoé Cambridge.
Firm of the Year: China
1 Gaw Capital Partners
3 Apollo Global Management
The Hong Kong-headquartered firm clinches the award, after being the runner-up last year, on the back of leading one of the largest shopping mall deals in southern China in recent years. Last April, Gaw Capital Partners, together with Morgan Stanley Real Estate Investing, sold the Metropolitan Plaza shopping mall in Guangzhou for just north of 4 billion yuan ($579 million; €547 million) to Asia’s largest real estate investment trust, Link REIT. The exit represented an approximately 15 percent internal rate of return and around 1.6x multiple for Gaw Capital, which purchased the asset alongside MSREI and an unnamed co-investor in 2013.
The firm also acted as a co-sponsor in the $550 million first close of the China Outlet Mall Fund. Alongside Gaw’s partner TH Real Estate, the German insurer Allianz Real Estate also invested $225 million in the core-plus, US dollar-denominated vehicle called ERES APAC II. Gaw Capital has invested in the vehicle through its Gateway Real Estate Fund V, its fifth opportunistic fund that closed on $1.3 billion last April.
Firm of the Year: Japan
2 CBRE Global Investors
3 PAG Real Estate
The New York-based asset management giant was part of two major privatization deals in Japan last year, a key opportunistic investing approach for the firm in the region. In August, Blackstone made an offer to acquire Astro Japan Property Group, an Australian-listed firm that invests in Japanese real estate, for a net consideration of ¥37.9 billion ($350 billion; €284 million). This came a few months after Astro’s board had rejected a takeover bid from Lone Star. Blackstone’s offer reflected a 2.38 percent premium to other independent valuations at the time and valued the property portfolio at ¥98.64 billion, according to an official filing. Around a month later in September, unitholders in the firm reportedly voted in favor of Blackstone’s bid.
The same month, Blackstone struck another Japan deal when a majority of unitholders of the Croesus Retail Trust, a Singapore-listed trust holding Japanese assets, agreed to the firm’s S$1.17 ($0.88; €0.72) per unit cash privatization offer. Blackstone’s $1.2 billion Croesus deal has given the firm ownership of a diversified portfolio of retail assets in Japan.
Firm of the Year: Australia
2 AMP Capital
3 Charter Hall
The Sydney-based property group struck several large institutional deals in 2017 for a diverse range of sectors, including retirement living, senior housing and a massive commercial development project. One of its key partnerships was an agreement with the Chinese insurance giant Ping An and Japanese property company Mitsubishi Estate to partially fund Lendlease’s A$1.5 billion ($1.08 billion; €1.04 billion) Circular Quay Tower project, aiming to be Sydney’s tallest office tower. Ping An owns a 50 percent equity interest in the project, while Mitsubishi owns 30 percent. In November, the Singaporean state fund GIC announced its investment in Lendlease’s “unique commercial and educational hybrid project” in Melbourne.
The firm was also successful in partially exiting its Australian Retirement Living business on the back of the investment opportunities arising from Australia’s aging population. In October, the Dutch pension fund manager APG Asset Management acquired a 25 percent stake, valued at around A$450 million, in the retirement villages operator, beating other bidders in a highly contested sales process that reportedly included Blackstone and China Investment Corporation.
Firm of the Year: India
2 Brookfield Asset Management
The emerging markets investment manager was active across different sectors and investment strategies in India last year, including a $350 million acquisition of a mixed-use development in Chennai after beating bids from some marquee global regional investors and managers.
A key highlight was the expansion of Xander’s retail partnership with APG Asset Management, with the purchase of a shopping mall in Punjab for more than $100 million. While the bulk of global capital opted to invest in either offices or residential in India, Xander led APG to make its debut retail investment in the country. In fact, as of late last year, the retail sector became the Dutch pension manager’s biggest bet in the country in terms of the total equity committed, totalling $450 million.
Through Virtuous Retail South Asia (VRSA), the Indian developer and operator of lifestyle shopping centers, both Xander and APG have been building their retail presence across the country, with a portfolio of over 5.5 million square feet. According to Sid Yog, founder of the Xander Group and chairman of VRSA, the NOI in the stabilised shopping centers has seeing a 20 percent growth, evidence the strategy is working.
Law Firm of the Year: Fund Formation
1 Clifford Chance
2 Paul Hastings
3 Simpson Thacher
Taking the top spot in this category is global law firm Clifford Chance, whose fund formation team worked on at least five pan-Asia real estate vehicles across different investment strategies in 2017. The largest of these vehicles was UK bank Standard Chartered’s Principal Finance Real Estate unit’s launch of a $1 billion pan-Asia real estate fund. Kai Schneider, managing partner of the firm’s Singapore office led this deal.
Clifford Chance also advised on the formation of Chelsfield’s debut Asia vehicle, which was led by partner Matt Feldmann. The London-headquartered manager Chelsfied purchased Dymon Asia’s real estate investment management business in late 2016, and then went on to launch Chelsfield Asia Fund I with a $500 million target. Additionally, the law firm was involved in the establishment of Hong Kong-based manager Phoenix Property Investors’ $300 million mezzanine-focused real estate fund.
Clifford Chance has nine offices across six Asia-Pacific countries and its fund formation team in the region is led by Mark Shipman.
Law Firm of the Year: Transactions
Mayer Brown JSM
Morrison & Foerster
Mayer Brown JSM defends the top spot as the leading real estate transactions law firm in Asia. Under the leadership of Keith Cheung, who heads the law firm’s Asia real estate practice, Mayer Brown JSM worked on some key deals in Hong Kong, China and elsewhere in the region last year, advising on several exits for Phoenix Property Investors as well as multiple acquisitions on behalf of AEW Asia and Pamfleet.
Most notable was the law firm’s involvement in the $588 million sale of Metropolitan Plaza to Asia’s largest real estate investment trust Link REIT in April last year. The sale of the 955,916-square-foot, four-level shopping mall in Guangzhou is believed to be one of the largest mall transactions in southern China in recent years. Mayer Brown JSM’s Hong Kong-based partner Ricky Yiu advised on the transaction.