LaSalle agrees S$430m Singapore exit

The Chicago-based real estate investment management firm has made a large exit from its third Asia opportunity fund. The fund is currently in asset management and exit mode after its investment period expired last year.

Chicago-based real estate investment management firm LaSalle Investment Management has sold Twenty Anson, a large office building in Singapore, in a deal valued at S$430 million (€201 million; $341 million).

The office was held in its third Asia opportunity fund, LaSalle Asia Opportunity Fund III, which closed on $3 billion of equity commitments in September 2008. It has been sold to CapitaCommercial Trust, Singapore’s first established REIT, which had a portfolio valued at S$6.2 billion as of 31 December last year.

Andrew Heithersay, director at LaSalle, described the sale of the 200,000 square foot office as the completion of a “round-trip” investment for the firm. He said it “validates the strategy of our LaSalle Asia Opportunity Fund series to manufacture core real estate assets in Asian gateway cities, aggressively manage them through to income stabilisation and then divest to institutional investors”.   

The property was completed in 2009 following development by LaSalle and its partner, the Kuala Lumpur-based developer Lum Chang, with which it has jointly developed properties before. It has since been 100 percent leased to tenants including BlackRock and Toyota.

Jones Lang LaSalle, the global property services firm which owns LaSalle Investment Management, brokered the sale.

LaSalle is in the midst of working through and winding down LaSalle Asia Opportunity Fund III having deployed $2.4 billion of the fund’s capital by the time the fund’s investment period expired last June. In October, PERE revealed the firm had cancelled the remaining $600 million of commitments in order to focus on raising a fourth fund. For that vehicle, LaSalle hopes to raise about $750 million largely from repeat capital commitments from its existing limited partner pool of investors.

The incoming fourth fund is expected to have similar investment targets to its larger predecessor, although Singapore is slated to be a secondary target market alongside Korea, Hong Kong and Taiwan. The firm’s primary markets will be Australia, Japan and China, according to one source familiar with the firm’s plans. Investments are expected to produce an IRR after fees and taxes of about 18 percent and an equity multiple between 1.7x and 1.8x.

Asian real estate reflected $8.9 billion of LaSalle’s total $47.2 billion of assets under management as of the third quarter of last year.