Asian property fund repositioned

15 September 2004

Macquarie Property announced today the ongoing successful repositioning of the Schroder Asian Properties L.P. (SAP) private equity (US$308 million) fund in the Asian market as the Fund continues its divestment phase.

“During the two years of our management, we have repositioned the fund through actively advising on a number of significant transactions and expanding the Fund’s exposure to direct real estate ownership in the region,” said Head of Macquarie Property Investment Banking, Mr Matthew Banks.

Macquarie Property was appointed to advise the Fund in February 2002. The Fund is now closed and has moved into divestment phase. It has investments in Korea, Japan, Hong Kong, Shanghai and Singapore spread across the office, retail, residential, hotel and serviced apartment sectors with a gross value of approx US$500 million (A$724 million).

Announcing two recent sales, Mr Banks said, “Strong results for investors have been achieved on the two investment properties sold in July and August, generating increased returns and are in line with the agreed portfolio structure of the fund.”

Macquarie Property and SAP recently sold a retail asset at No. 8 Russell Street in Causeway Bay, Hong Kong, for HKD$525 million (A$97 million) to a subsidiary of the Emperor Group, a listed property company in Hong Kong. Some of the highest retail market rental levels in the world are achieved in this area of Hong Kong. Macquarie advised on the purchase which was made in April 2003, at the height of the SARS crisis. Under the active management of Macquarie, net operating income was increased 11 per cent prior to the sale.

SAP has also completed the sale of a general merchandise store retail property in Tokyo to an institutional investor. SAP held a majority interest while the balance of the investment was owned by a major US based global real estate investor. The store was purchased in December 2000 for JPY6 billion (A$79 million).

“The timing of the sale was in accordance with the original objectives of the investors, and has benefited from increased interest in retail assets in Japan by REITs,” said Mr Banks. “The sale will result in a strong return for investors over the Fund’s three and a half year ownership of the building.”

“Looking beyond the recent activity, we see strong growth continuing in the Asian region and increased demand for property. Together with our associates, we are in an excellent position to offer investors a broad range of innovative products and services through Macquarie Property, Macquarie Global Property Advisors and First China Property Group,” said Mr Banks.

In Asia, Macquarie Property and its associates are focussed on real estate investment banking, property funds management, development and asset management in Korea, Japan, Hong Kong, China and Singapore.

Macquarie Property has more than 260 staff worldwide and recently opened an office in Tokyo further expanding its international network.

For further information please contact:

Matthew Banks
Head of Macquarie Property Investment Banking
Tel: (612) 8232 3333

Robyn Turner
Senior Communications Manager
Macquarie Banking and Property Group
Tel: (612) 8232 6989