ARA plans China, India, Japan property funds

By Kevin Lim

SINGAPORE (Reuters) - Singapore property fund manager ARA Asset Management said on Tuesday it plans to launch country-focused funds for China, India and Japan to take advantage of declining real estate prices that it expects will bottom in late 2009.

ARA, partly owned by Hong Kong tycoon Li Ka-shing's Cheung Kong (Holdings), would also consider taking its listed real estate investment trusts (REITs) private if share prices remained weak, Group Chief Executive Officer John Lim told Reuters in an interview.

"In terms of the deal flows, we do see more and more opportunities coming up," he said in reference to properties that are being offered at reduced prices. Credit markets have also loosened slightly from October-November last year in that bankers were now willing to consider proposals from investors such as ARA, he added.

Asian property prices have fallen sharply since the middle of last year, and listed developers and property trusts in Asia excluding Japan are now trading around 30 percent below net asset values, JPMorgan said in a report on Monday.

Suntec REIT, which owns office and retail space in Singapore's central business district and is the largest of four listed property trusts managed by ARA, was last traded around S$0.815 a unit -- less than half its value at the start of 2008.

"As a responsible manager, we always explore all options (and) privatisation is one of the options," Lim said when asked about the fall in REIT prices.

Besides Suntec, ARA also manages Fortune REIT in Singapore, Prosperity REIT in Hong Kong and AmFIRST REIT in Malaysia along with several privately held funds.

Lim also said that although office rents in Singapore have fallen from the highs reached in the middle of 2008, most tenants renewing leases this year would have to pay higher rates as current rents are still more expensive than three to four years ago.