Croesus eyes logistics property fund after Singapore IPO success

The Croesus Group, an Asian real estate manager, is evaluating another fund with logistics properties after listing its first trust holding Japanese malls in Singapore last year.

Croesus has access to 24 to 36 facilities in Japan and the U.S. and may seek to raise about US$500 million ($634 million) to US$600 million through the public or private markets as early as the second quarter next year, Co-Founder Jeremy Yong said. The company with a presence in Japan, Singapore and China also sees opportunities in data centers, solar farms and hospitality, he said.

“Our focus is on income-generating asset space, any assets that generate a stabilized yield, robust income streams and tangible dividends,” Yong said in an interview in Singapore yesterday. “That’s where we want to be.”

Croesus Retail Trust, which holds shopping malls in Japan including Luz Shinsaibashi in central Osaka and Mallage Shobu in greater Tokyo, debuted trading on the Singapore stock exchange in May last year. The trust has increased its number of assets to seven from the initial four, with the value rising 55% to 82 billion yen ($958 million) since the listing.

Dividend per unit could increase by 4% in 2016 as rent renewals will be at higher rates, Yong said. Some tenants at the Mallage Shobu mall have agreed to rent increases exceeding 20%, he said.

Japanese Backing

The trust, backed by Japanese builder Daiwa House Industry Co. and trading house Marubeni Corp., agreed to buy One’s Mall in greater Tokyo earlier this month and may resume acquisitions in 2015, Yong said. He may also expand outside of Japan a couple of years later.

Singapore-based Croesus Retail units have gained 5.1% this year to 93 cents yesterday, the same as the IPO price.

While Croesus has also been looking to manage hospitality assets in Japan, the selection of Tokyo to host the 2020 Olympic Games has led to soaring real estate prices, Yong said.

“After retail we had planned hospitality assets,” but the hotel properties are too expensive, Yong said, adding that his firm is exploring opportunities in serviced residences as well.

Outside of Japan, Yong may build logistic facilities in Taiwan and Malaysia, and data centers in Europe by seeking local partnerships.