TOKYO U.S. real estate firm LaSalle Investment Management plans to invest $3.3 billion in Japanese property over the next 18 months, the head of its Japan arm said on Tuesday.
LaSalle Investment Management, a unit of property services firm Jones Lang LaSalle (JLL.N), restarted buying Japanese assets late last year, sensing opportunity in a property market hit hard by the global credit crunch.
"Property prices in Japan have fallen to an appropriate level at which we can expect a sufficient return in the long term," Yasuo Nakashima, chief executive officer of LaSalle's Japan arm, said in an interview for the Reuters Global Real Estate and Infrastructure Summit.
"Asset prices may fall further, but we are sure that they would go up to an adequate level after dropping temporarily."
While the recovery in the world's second-largest real estate market has been slower than other markets in Asia, there are more distressed assets in Japan at cheaper prices, Nakashima said.
Sales of distressed property assets had until recently been slow as owners were reluctant to sell them at rock-bottom prices.
But banks are now more willing to have their clients unload such assets after bolstering their finances through a round of capital raising, Nakashima said.
"Banks have accelerated the process of selling distressed assets and have been approaching us since early this year. We have lots of deals in the pipeline."
LaSalle plans to invest $2 billion in Japanese offices, hotels and residential real estate through its Asia Opportunity Fund III and $1.3 billion in warehouses through its Japan Logistics Fund II by the end of next year.
Fresh investment in Japan this year is likely to reach $2.2 billion, six times the level in 2009.
LaSalle has $38.3 billion in assets under management globally.
(Reporting by Nobuhiro Kubo and Michiko Iwasaki; Editing by Edwina Gibbs)