ARA Asset Management

[Musicwhiz]

The Straits Times
www.straitstimes.com
Published on Mar 13, 2013
ARA plans to double assets over five years
Reit manager wants to focus on expanding private property funds

ARA Asset Management, a manager of real estate trusts partly owned by billionaire Li Ka Shing, wants to double assets under management over five years as its private funds buy more properties.

ARA, which manages about $22.1 billion of assets through real estate investment trusts (Reits) and funds, plans to expand through acquisitions and by enhancing existing properties, chief executive John Lim said in an interview on Monday.

Its real estate funds, which make up less than a third of assets managed by the Singapore-based firm, are expected to increase to half in five years, he said.

With six Reits listed in Singapore, Hong Kong and Malaysia, ARA now wants to focus on expanding its private property funds after attracting the largest US pension investors.

The stock yesterday ended 2.5 per cent higher at $1.85.

"Capital markets will continue to grow but I think there's more potential for us on the private markets side," Mr Lim said.

"If we continue to prove to the market that we can increase the assets under management, then the share price will continue to grow."

Its funds, which have invested in properties from an empty mall in China to a Singapore convention centre, will focus on the retail and office sectors, Mr Ng Beng Tiong, chief executive of ARA's funds unit, said in the same interview.

California Public Employees' Retirement System, or Calpers, the largest US pension fund, and Teacher Retirement System of Texas have invested in the funds, Mr Lim said.

Japanese and Korean funds are potential sources of capital, he said.

"You're looking at a market full of liquidity," Mr Lim said. "Money is ready, it's about how well you're going to manage it."

Last October, ARA cancelled an initial public offering (IPO) of Dynasty Reit, backed by commercial real estate in China, amid sluggish demand for new equity.

The IPO, which had sought to raise as much as 5.4 billion yuan (S$1 billion), is still being considered, Mr Lim said.

The assets for Dynasty Reit are held by ARA's property funds, he noted, adding that the biggest concern is China's taxes.

Mr Lim owns 33 per cent of ARA while Mr Li's Cheung Kong Holdings holds 13.9 per cent, according to data compiled by Bloomberg.

The Hong Kong developer had offered ARA's Reits the first right to buy some of its properties.

ARA is also focusing on expanding its existing trusts including Cache Logistics Trust and Fortune Reit.

These plans may include buying other Reits, Mr Mark Chu, its director of business development, said in the interview.

BLOOMBERG