Macquarie Asset Management (MAM) has closed of Macquarie Real Estate Partners (MREP), an opportunistic real estate fund with approximately $1.9 billion of equity to deploy under a global strategy.
MREP is the second vehicle in MAM's real estate’s opportunistic fund series, following the Asia Pacific opportunistic real estate partnership (MREP Asia 1), which closed in 2021 and is now deployed across developed markets in the region.
One of MREP's investments is in Unified Industrial (UI), which has properties in both Japan and China.
James Kemp, head of real estate, Apac, MAM, told FinanceAsia: “We have been investing in Apac logistics for over 15 years. Over this time, we have invested in and grown a number of logistics businesses, including J-Rep (now Goodman’s Japan platform) and LOGOS.”
Sydney-based Kemp added: “Continuing this investment strategy in Apac logistics, MREP has invested in UI. UI is currently most active in its core market of Japan, where there continues to be an undersupply of modern logistics space and an emergence of new logistics hubs in response to the ‘2024 issue’ that limits the driving time of truck drivers.”
On strategy, he said: “The business plan for UI is to expand across Apac to scale the business and selectively take advantages of investment opportunities in other logistics markets.”
Mandate
MREP has a global mandate focused on predominantly developed markets. The money was a combination of fund commitments and co-investment demand, from a strong contingent of institutions, including pension and sovereign wealth funds in Australia, Canada and the Middle East.
The aim is to partner and invest with specialist operators and aims to create a diversified portfolio targeting real estate sectors aligned to the key global themes of technology, demographic shifts and sustainability.
Capital from MREP has deployed across the logistics, living and new economy office sectors. In addtion to UI, this includes: logistics warehousing groups, Logistics Property Company in the US; rental housing platform, Goodstone Living in the UK; European sustainable office developer, Edge and a partnership with US self-storage specialist, LaTerra Storage.
The portfolio also includes an investment in a land lease community business in Australia, which will service the residential housing requirements for the growing over-55 demographic, according to a media release. These investments and partnerships with specialist operators aim to enhance MREP’s access to real estate opportunities that the real estate cycle presents over the next 12-18 months.
The broader series has also invested in an Australian build-to-rent platform, local eesidential, and specialist residential community developer, Winton in New Zealand.
Positive Apac fundamentals
According to MAM, the Apac region has positive investment fundamentals for real estate compared with the rest of the world, underpinned by resilient economies with strong GDP growth, access to large and growing cities driven by urbanisation and opportunities to institutionalise fragmented property sectors.
MAM describes Japan as “highly investable with fundamentals and access to credit holding up, presenting interesting investment opportunities. The ability to structure investments into such opportunities is providing a better risk-adjusted return than straight equity for the same underlying asset exposure.”
Despite the level of logistics construction in Japan over the past 20 years, the market is still undersupplied with modern logistics space. In addition, the “2024 Issue” that introduces new rules restricting truck driver hours is prompting tenant demand and leading the emergence of logistics hubs between Tokyo and Osaka, MAM said.
Commenting on the closure of the funds, Eric Wurtzebach, global head of real estate at MAM, said in a statement: “We have a long history of investing in specialist operators and we are delighted to secure the close of our second opportunistic vehicle leveraging this strategy."
Wutzebach added: "Our existing and new investors have demonstrated strong support for this strategy which both enhances our access to high quality real estate and provides an opportunity to generate alpha.”
