Mitsubishi joins forces with CLSA for long-term Asia-Pacific strategy

Japanese property company Mitsubishi Estate has given a $300m (€284m) mandate to Hong Kong-based CLSA Capital Partners to source core real estate in Asia-Pacific.

IPE Real Estate understands that a new holding structure will be created and that CLSA Capital Partners will look to bring in more third-party capital.

The new vehicle, CLSA Capital Partners Real Estate, could eventually have more than $1bn of capital to invest once leverage is added.

According to sources, CLSA Capital Partners plans to “double or triple” the $300m pool of capital provided by Mitsubishi Estate.

The vehicle, which will be staffed by a new team, will implement the mandate covering the entire Asia-Pacific region, including Australia.

It involves sourcing and management of assets. According to industry sources, Mitsubishi Estate will provide CLSA Capital Partners with some of its own resources.

Mitsubishi Estate is understood to have appointed CLSA Capital Partners on the strength of its track record.

CLSA Capital Partners has established its reputation through Fudo Capital, a real estate platform led by John Pattar, who joined CLSA in 2004.

Fudo Capital focused on opportunistic and value-added strategies, buying, improving and selling assets. The platform’s first two funds are said to have generated returns averaging more than 30%.

In contrast to Fudo Capital, the new vehicle will focus on acquiring income-producing assets and holding them for the long term.

Last year, Mitsubishi Estate was reported to be seeking to create a fund of ¥100bn (€826m) to invest in core income-producing properties in developed markets overseas.

At the time, Japanese media reported that Mitsubishi Estate planned to raise capital from Japanese pension funds and life insurers to invest in prime office buildings and commercial facilities in major US and European cities.

Sources believe the venture with CLSA complements its strategy, giving it coverage in Asia-Pacific.

Mitsubishi Estate late last year entered into two joint developments of prime office buildings.

In December, it took up a 30% interest in development of Sydney’s AUD1.5bn Circular Quay Tower, a project by Lendlease, and in November it entered a joint venture with Indonesian developer Gesit for an office project in Jakarta.

Pattar declined to comment. IPE Real Estate was unable to reach Mitsubishi Estate.

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