Straits Times: Sat, Aug 11
ARA Asset Management has pulled in almost US$1 billion (S$1.25 billion) for two
private real estate funds.
The funds were raised via the new ARA China Investment Partners (CIP) with a committed capital of US$500 million and the firm's existing vehicle ARA Asia Dragon Fund (ADF) II with US$441 million.
ADF II, which has investors from Japan, Singapore and the United States, is a pan-Asian fund with an expected internal rate of return of more than 20 per cent.
CIP - whose sole investor is the California Public Employees' Retirement System - expects returns of about 12 per cent.
It will target high-quality, income-producing office and retail properties in key cities in China, including Hong Kong.
With an initial term of 10 years and two additional extension options of six years each, its portfolio is expected to grow significantly.
ARA group chief executive John Lim said yesterday that raising funds has been "very challenging" in this climate of uncertainty with some investors also choosing to remain on the sidelines until next year when the US elections are over and there is more clarity.
If the market is right, however, one of its options will be to embark on an initial public offering of a yuan-denominated real estate investment trust, Mr Lim said.
This would see it inject its Chinese office and retail properties from its flagship Asia Dragon Fund into what would be Singapore's first yuan-denominated real estate investment trust.
ARA's second-quarter net profit rose 4 per cent to $15.4 million on the back of higher management fees. Total revenue in the three months to June surged 15 per cent to $29.1 million compared with the same period last year.
Quarterly earnings per share was two cents, compared with 1.92 cents a year earlier, while net asset value per share came in at 27.66 cents, up from 24.59 cents as of Dec 31.
ARA's total assets under management was $21.8 billion as at June 30 - up 16 per cent from a year ago. An interim dividend of 2.3 cents per ordinary share was declared. It shares closed unchanged at $1.425 yesterday.
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