In Asia, Brookfield is looking for corporate buyouts.

 

Brookfield Asset Management, a Canadian real estate behemoth, has announced an aggressive expansion plan in Asia that will see the corporation invest and grow a client base.

The business, which has total assets of $180 billion, including $103 billion in real estate, has already established a foothold in Australia. Properties for sale in Doha

Rather of constructing from the ground up, Brookfield built its competence in Australia quickly through acquisitions. It bought Babcock & Brown Infrastructure, a publicly traded property fund that was drowning in debt, and subsequently Multiplex, a major Australian developer. Following those acquisitions, it purchased Thakral Holdings, a REIT that, like most of its Australian peers, was trading at a significant discount to net asset value.

Rather than assembling a portfolio piecemeal across Asia, Brookfield is now considering similar deals, such as purchasing existing real estate enterprises.

"We effectively developed a $20 billion business in three transactions — that's the most likely path Brookfield will take in Asia to expand its competence," Niel Thassim, the company's new head of Asia for its private funds group, told World Property Channel. "We are unlikely to purchase a property here or there. We're much more likely to conduct a series of transactions that allow Brookfield to not only obtain AUM at a fair price, but also a platform."

Thassim left RREEF, where he was the head of Asia Pacific real estate, in February to join Brookfield. In June of last year, he left ship after a proposal for Guggenheim Partners to buy RREEF from Deutsche Bank fell through.

Brookfield's real estate portfolio is approximately twice the size of RREEF's $50 billion in assets.

It also distinguishes itself from many private equity investors by not just owning but actively operating properties. Its 650 or so office personnel are supplemented by 23,000 on-site management staff who monitor operations at the properties they control.

"Rather than just sticking at the financial investment level, Brookfield does everything from soup to nuts," Thassim explained, noting that Brookfield is often the largest investor in each of its funds. "It's primarily about operations and investments. It enables us to better manage risk."

Brookfield presently has no assets in Asia outside of Australia; it has a portfolio of 345 office and retail assets in North and South America totaling 300 million square feet.

It is now attempting to build an Asian portfolio, with a focus on office, retail, and industrial properties. Whereas many investors used to see Asia as a place to get hazardous development exposure, Brookfield is now looking to buy core and value-added properties as well as create its own.

Thassim is also in charge of expanding the company's Asian clientele. China, Japan, South Korea, Singapore, Hong Kong, and Malaysia are recognized as the main pools of capital, with China, Japan, South Korea, Singapore, Hong Kong, and Malaysia as the main suppliers of money. Taiwan is a new target, having just allowed its pension funds to engage in overseas real estate.

Brookfield aspires to be a global alternative investment manager, according to Thassim. "Obviously, Asia must be a part of that, both as a source of finance and as an investment destination."