Daily Management Review

Fortress, Blackstone and Elliot make it to the second round of bidding for Japan’s Simplex Investment Advisors


Blackstone Group, Elliot Management and Fortress Investment Group vie for a pie of Tokyo’s real estate.

According to three people in the knowledge of these matters, three U.S based investments groups have been shortlisted for the second round of bidding to acquire Japan’s Simplex Investment Advisors.
The three who have been shortlisted for the second round are: Blackstone Group, Elliot Management and the Fortress Investment Group. The acquisition of Japan’s Simplex Investments Advisors could top as much as $1 billion.
One source has also revealed but did not wish to be identified as this process is not open to public, Japanese property giants Kenedix Inc and Hulic Co, are also in the race for the purchase of Simplex Investment Advisors. The second round of bidding is expected to be completed by the end of this month.
Aetos Capital Real Estate, a U.S based property investment fund, is the one who has put Simplex, a real estate asset management firm, on the market. Interestingly, as per whispers emanating from this bidding process, the winner of the final bid may sell off REIT. Owned by Simplex, REIT manages ISA Reit Inc, a real estate trust.
It also appears that the bidders instead of fighting one another, may team up for the second round of bidding. In the first round they bid in their individual capacity. A spokesperson from Simplex declined to comment while the same position was taken from an official from Aetos.
The deal comes at a most opportune time when foreign investors are looking forward for investment opportunities in the hot Tokyo real estate market which is likely to see movements in the northern direction.
Of special interest to bidders are two buildings that Simplex owns. One is a hotel near the Tokyo Disney Resort and the other is a 12 storied office building situated in Tokyo's Toyosu district, which is very close to the venue for the 2020 Tokyo summer Olympic Games, said multiple sources.
Given the surging demand for accommodation and with Japan attracting a record number of foreign tourists, hotels have become a real estate magnet and are distinctly a class apart from other property segments. The weak yen and the easing of visa requirements for some Asian countries have also added to Japan’s charm for foreign tourists.
Further, investors also believe that the rent for office buildings in Tokyo will continue its upward trend as the economy recovers and grows.
Monetary policies deployed under Japan’s Prime Minister Shinzo Abe have acted as a bedrock for asset value chain including properties, which have greatly supported this investment boom.
Office rents in Tokyo have seen their greatest heights since April 2011, however some analysts are skeptical and say that the growth will be capped by the imminent launch of newly constructed office towers.
Source(s): Reuters.com