LaSalle buys Shanghai building from Keppel-backed Alpha fund

Shanghai. Photo by Riku Lu on Unsplash

Real estate investment manager LaSalle Investment Management has acquired Shanghai International Plaza (SIP), a mixed-use building in Shanghai, from Alpha Asia Macro Trends Fund II.

LaSalle acquired the property on behalf of LaSalle Asia Opportunity V, the fifth in its series of closed-end, pan-Asia opportunistic funds.

Alpha Asia Macro Trends Fund II (Alpha) is a fund managed by Alpha Investment Partners, a real estate investment arm of Singapore’s Keppel Group. In a separate statement, it said it had acquired the Shanghai property in 2014 for approximately $133 million.

“For Shanghai International Plaza, our rigorous value creation initiatives have allowed us to realise an internal rate of return of close to 20% on the sale of the investment,” said Alpha CEO Alvin Mah.

While the financial terms of the deal were not disclosed, a report in Mingtiandi put the price tag at about $376 million.

“Our experienced team are well-placed to implement our opportunistic strategy and reposition the building in this prime location. As China’s largest financial centre with a thriving economy, we are optimistic on the growth of the Shanghai’s office sector,” said Mark Gabbay, chief executive officer and chief investment officer of Asia Pacific, LaSalle.

SIP, located on Sichuan North Road, Shanghai is a 30-storey mixed-use office and retail building with an approximate floor area of 56,000 square metres. The building has a 90 per cent occupancy rate from logistics, shipping and domestic financial firms.

“We see significant opportunity to improve the asset’s income profile via repositioning. Our asset enhancement plan includes refurbishing the retail podium as well as upgrading the lobby and common areas,” said Claire Tang, head of acquisitions for China at LaSalle.

As of the fourth quarter of 2017, LaSalle has about $59 billion of private, public equity and private debt capital under management.

As for Alpha Asia Macro Trends Fund II, it is a $1.65-billion vehicle that made a final close in mid-2013. The third value-add Pan-Asian fund in the flagship series was launched in 2016 with a target size of $1 billion. As at end-2017, Alpha has raised over $560 million.

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