Sovereign wealth fund makes Asian debut

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St Martins, the property company of Kuwait’s sovereign wealth fund, has bought a 27-storey residential tower in Tokyo for JPY 13bn (£105m) in its Asian debut.

The Kuwait Investment Authority owned property group bought the Lietocourt Arx Tower in Minato, Tokyo’s business district, from fund manager KK daVinci Advisors.

The 319,700 sq ft building, which was completed in February 2007, has 281 serviced apartments.

The purchase was partially financed by a bond issue to The Tokyo Star Bank Limited, arranged through the real estate finance desk of Nikko Citigroup.

St Martins said that it had spent a year selecting opportunities in the Asian market, and that the purchase was the first of a number of planned deals in the region.

Nigel Brown, managing director at St Martins, said: ‘Whilst we have been considering investment opportunities throughout Asia, including China, Hong Kong, Singapore Vietnam and Australia, our future Asian strategy is likely to focus on Japan, China and Australia.

'Whilst we will continue to review the markets, and specific opportunities, we consider that it may be later in the year before similar quality assets become available at attractive prices and any signs of recovery are seen in the markets.

‘We anticipate a correction in the pricing in China to make investments more attractive in comparison for instance to yields now available in the UK and other developed markets. St Martins will also consider landmark opportunities in the major cities in Continental Europe and the UK when the markets become more stable.’

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