The sale by UK insurer Aviva of its Asia real estate investment business to US investment bank JPMorgan was confirmed today, almost a year after news of the deal first surfaced.
JPMorgan Asset Management, the division of the bank responsible for its principal real estate investment activities, announced it had acquired the platform from Aviva Investors, the business at Aviva similarly responsible for its real estate investments, without disclosing financial terms.
There has been much speculation about the sale with the news first revealed at the start of the year. There was also speculation surrounding how much the platform would change hands for, however, PERE had been informed by a source familiar with the matter prior to the deal closing that the price would be somewhere between $10 million and $15 million.
“Growing in Asia Pacific has been a strategic imperative for us as a global real assets solutions provider,” said Joe Azelby, head of global real assets at JPMorgan Asset Management. “With this acquisition, we have expanded our real estate investment capabilities, across the full risk spectrum from core to opportunistic strategies, to help our clients increase their allocations to dynamic growth markets in Asia Pacific,” he added.
In buying Aviva’s Asia real estate investment platform, JPMorgan effectively inherits approximately 20 staff currently managing a number of funds and separate accounts, including a pan-regional property fund, a series of small Australian logistics property funds and a core-plus club fund jointly managed with Tokyo-based private equity real estate firm, Secured Capital. In all, the platform is understood to have about $1 billion of assets under management.
As such, the deal sees JPMorgan’s real estate assets under management double in size to about $2 billion and its reach expand from China and India in to Singapore, Australia, Japan and New Zealand too. It also raises the headcount to about 50 staff, JPMorgan said.
David Chen, JPMorgan Asset Management’s head of real estate in Asia, described the transaction as presenting an “enormous investment opportunity” for its clients. He said: “We have accelerated the expansion of our geographic footprint into key real estate markets and added high quality personnel on the ground with extensive market expertise and deep local relationships.” Not joining, however, is Aviva’s platform head, Ian Hally, who will seek other opportunities.
For Aviva’s part, it said the transaction was part of a wider effort to simplify its business and move towards an “integrated operating model and organisational structure.” He said: “We selected JPMorgan to help ensure stability and continuity for the investors in our Asia Pacific real estate strategies.”
The deal was brokered by property agent Jones Lang LaSalle.