Key Japan real estate sector seen tripling

August 21, 2008
Key Japan real estate sector seen tripling
Logistics property market investments may grow 3-fold in a few years:
LaSalle

(TOKYO) Japan's market for investment in logistics real estate - such
as warehouses, distribution centres and ports - is seen growing
threefold within a few years as more players enter a sector
considered stable even in an economic slowdown, an executive of
LaSalle Investment Management said.

The real estate securitisation investment market was about 320
billion yen (S$4 billion) in 2007, accounting for only 3.8 per cent
of Japan's total Reit (real estate investment trust) investment.

But LaSalle, which manages US$54 billion assets in global real estate
markets, sees such logistics-area investment accounting for more than
10 per cent of total J-Reit investment in the near future, executive
officer Yosuke Yoshikawa told a Tokyo seminar.

'Logistics property investment is still immature here for reasons
such as a dearth of investment opportunities and limited information
disclosure . . . maybe that's why only one J-Reit is solely focusing
on the logistics field,' Mr Yoshikawa said.

'But considering its big and established presence in Europe,
especially in Britain, and the relative strength of the economic
slowdown, logistics real estate investment has a big growth
potential,' he said.

After raising 360 billion yen, the Tokyo-based investor
launched 'LaSalle Japan Logistics Fund Two' last year.

LaSalle still has some 280 billion yen left to invest until 2010
after spending 80 billion yen since the fund's launch, another
executive told Reuters after the seminar.

A planned investment would include development of multi-purpose
logistics centres and 'off-balance- sheet' support for logistics
companies.

LaSalle is a unit of Chicago-based property services company Jones
Lang LaSalle Group which manages property investments of
institutional investors such as pension funds and companies.

Tokyo-based LaSalle bought out an asset management company in 2007
and injected fresh capital into a Reit that has since been renamed
LaSalle Japan Reit Inc.

LaSalle Japan Reit closed down 12.3 per cent at 191,200 yen
yesterday, while the Tokyo Stock Exchange's Reit index shed 0.3 per
cent to 1,269.54.