UPDATE 1-Oaktree to raise stake in Japanese REIT Re-plus

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TOKYO, Aug 28 (Reuters) - U.S. investment firm Oaktree Capital Management said it would raise its stake in Re-plus Residential Investment Inc (8986.T) to 48 percent by launching the first tender offer for a real estate trust in Japan.

Oaktree, which owns 37.6 percent of Re-plus after completing the purchase of new shares on Thursday, is aiming to buy an additional 10.79 percent by offering 260,000 yen a share, a 33 percent premium to the latest market price.

The tender offer is the first in Japan targeting real estate investment trust (REIT) units, which are similar to shares. A successful tender would bring Oaktree's total investment to 15.72 billion yen ($144 million).

Tokyo's REIT index .TREIT has lost more than half its value since a peak last May, hit by the global credit crunch and weakness in the property market. The slide has piqued the interest of bargain hunters, including foreign funds.

"We believe valuations in the Japanese REIT market represent an excellent investment opportunity," Robert Zulkoski, a managing director at Oaktree, said in a release.

Re-Plus had announced on Aug. 12 that it would issue new shares to Oaktree at 175,000 yen each, raising funds to acquire assets and refinance loans. That transaction was completed on Thursday, lifting Oaktree's stake to 37.6 percent.

The tender offer runs from Friday to Oct. 7.

Shares of Re-plus, which has assets of more than 100 billion yen invested in residential properties, have gained 6 percent since Aug. 12, closing Thursday at 195,100 yen. (Reporting by Junko Fujita and Nathan Layne; Editing by David Holmes)