(For other news from the Reuters Global Real Estate and
Infrastructure Summit, click here)
* Sees Japan investment at least doubling in 1-½ years
* Expects sales of distressed property assets to accelerate
(Adds details, quotes)
By Lee Chyen Yee and Maggie Lu
HONG KONG, June 14 Pacific Alliance Group, an
Asia-focused fund investment manager, said it expects to at least
double its investments in Japan over the next year or so as
financial institutions speed up sales of distressed assets.
Pacific Alliance Group planned to raise investments in Japan
to as much as $500 million over the next 1-½ years from about
$200 million now, Anthony Miller, chief executive of Pacific
Alliance Japan, said at the Reuters Global Real Estate and
"The Asian fund has approximately $200 million invested in
Japan, which we've invested in the last 18 months," Miller said
via telephone from Tokyo. "It is our intention to grow our
business here significantly."
Miller said Pacific Alliance Group planned to increase
investments in Japan, the world's second-largest economy and
Asia's biggest property market, by $200-300 million over the next
Sales of distressed property assets had been slow as owners
were unwilling to get rid of them at rock-bottom prices.
"That seems to be changing. In the last 2-½ months since
the end of March, we have seen a dramatic increase in the number
of distressed assets that are seriously for sale," said Miller, a
Harvard graduate who joined Pacific Alliance Japan in June 2009.
He said Pacific Alliance would be looking for opportunities
in Japan as tens of billions of dollars worth of debt, including
securitised debt, met maturity dates in the coming year or so.
Sales of distressed assets would likely speed up in the
meantime as some financial institutions are not expected to roll
over their debt, Miller said.
Morgan Stanley (MS.N) won an agreement with lenders for a
60-day extension on about $2.4 billion in loans used in a
troubled hotel investment in Japan, sources said in April, with
the market watching closely what would happen once that extension
Miller said Pacific Alliance Group would be looking at hard
assets, such as office and residential property, although resorts
in Japan would be its least favourite as they were hit the
hardest during a downturn.
Miller noted that he was mindful of external risks that could
affect Japan's economy and real estate sector.
"If China falls off the cliff, Japan will certainly suffer.
The biggest risk to Japan is China and the second is America. The
third is Europe," he said.
Pacific Alliance Group had about $5 billion in total assets
under management, which included $2.35 billion AUM by Secured
Capital, in which it held a 46 percent stake, he said.
(See www.reutersrealestate.com for Reuters' global service for
real estate professionals)
(Editing by Chris Lewis)