Published: 22 February 2005
Australia-listed global investment & advisory firm Babcock & Brown has settled on an $A600 million start to its Japanese property trust, the first in Australia to invest in the Japanese real estate market.
Babcock & Brown said on 31 January it was considering the idea. Yesterday it said the Babcock & Brown Japan Property Trust would acquire an interest in a diversified portfolio of office & retail properties in the central & greater Tokyo area for Â¥47 billion ($NZ616 million). The initial portfolio will consist of 8 office & 4 retail properties.
Eric Lucas, managing director of the manager, Babcock & Brown Japan Property Management Ltd, said future acquisitions could “provide the opportunity for creating unitholder value through redevelopment, repositioning and applying more pro-active & cost-effective asset management.”
Babcock & Brown established a joint venture with Nomura in 1986 and established its own Japanese subsidiary in 1998, when it became actively involved in property investment, financing & asset management there. Mr Lucas said this was a natural progression.
He said the vast Japanese property market had fragmented ownership, yields were attractive relative to the cost of debt funding, and increasing property turnover generated opportunities.
Japanese land prices had fallen dramatically over the past 15 years, but Mr Lucas said they were showing signs of stabilization, and growth in some areas.
Babcock & Brown has reserved 10% of the offering for itself & employees. The rest of the offer will be made to institutions & brokers. There won’t be a public offer. Trading in the units is expected top start on Monday 4 April.
Website: Babcock & Brown
1 February 2005: Babcock & Brown to check out Japanese property investment