November 16, 2011 / 6:46 AM / 6 years ago

Japan's Kenedix preps mid-2012 residential REIT IPO

* Residential REIT assets could reach up to $910 mln -president

* Kenedix considers health-care REIT -president

By Alex Frew McMillan

HONG KONG, Nov 16 (Reuters) - Japanese property manager Kenedix Inc plans to list a residential real estate investment trust in mid-2012, after winning a license for the fund last month, company president Atsushi Kawashima said on Wednesday.

The REIT, Kenedix Residential Partners, will have 30 billion yen to 70 billion yen ($390 million to $910 million) of assets, Kawashima said. Since it will fund around 40 percent of that with debt and the rest with equity, the initial public offering would give it a market capitalization of 18 billion to 42 billion yen, he added.

The IPO is planned for the “middle of next year, depending on the market,” Kawashima said on the sidelines of the MIPIM Asia real estate conference in Hong Kong.

It will be the third REIT from Tokyo-based Kenedix, which was set up in 1995 to handle the Japanese real-estate operations of U.S. property investor and manager Kennedy-Wilson.

Kenedix already operates a listed logistics fund, the Japan Logistics Fund, and Kenedix Realty Investment Corp., which focuses on mid-size office buildings. Kenedix had 1.1 trillion yen in property assets under management as of the end of September.

The company is also looking at developing a health-care REIT, since it manages a small amount of health-care property, but “the liquidity of health care is very limited,” Kawashima said.

About 60 percent of the residential REIT’s property will be in Tokyo and 40 percent in the rest of Japan. Kenedix currently manages 213 billion yen in assets in residential properties, with new developments being sold into the residential REIT.

“We have lots of residential in our private funds,” Kawashima said. “(That) will be the future pipeline, so that investors understand the small J-REIT can grow.”

After slowing to a crawl following the March earthquake in northern Japan, the J-REIT market, the largest in Asia, is once again showing signs of life.

The fund is seeking to sell 50 percent of the shares in the IPO to overseas investors, with the rest going to Japanese.

Global Logistic Properties is also planning to list a REIT that could raise at least 100 billion yen in an offering expected by the end of the year. That would mark the first IPO for a Japanese REIT in four years.

The Ministry of Land, Infrastructure, Transport and Tourism, which together with the Financial Services Agency licenses REITs in Japan, says it has several applications pending for new REITs, including one focused on shopping centers and multiple listings focused on logistics.

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