Blackstone, PAG eyeing bids for Japan’s Simplex in deal seen worth $1.25 bln, say sources-Reuters

(Reuters) Blackstone Group, Hong Kong-based investor PAG and Japanese property firm Hulic Co are among potential bidders for property asset manager Simplex Investment Advisors in a deal that could fetch around 150 billion yen ($1.25 billion), people with knowledge of the matter said.

U.S.-based property investment fund Aetos Capital Real Estate has put Simplex up for sale, the people told Reuters, with a first bidding round to close by the end of this month.

The deal comes as foreign investors with plentiful capital are looking for investment prospects in Japan even as the number of potential targets falls. Borrowing costs are low and the yen has fallen almost 60 percent against the dollar from a record high in 2012, making Japanese assets much cheaper for U.S. investors.

Meanwhile for potential Japanese bidders like Hulic, the acquisition of Simplex, which also owns Simplex REIT Partners, the manager of real estate trust SIA Reit Inc, could pave the way for expansion on their home turf.

Officials from Blackstone, PAG and Hulic declined to comment.

Aggressive monetary expansion policies taken under Prime Minister Shinzo Abe during his two and a half years in office have driven up the value of property and other assets.

“Japan’s market has heated up too much now and the number of investment opportunities are limited,” said a property broker who is not involved in the deal. “Property owners do not want to sell their assets and even if they do, the price is too high.”

Simplex’s assets include a hotel near Tokyo Disney Resort and a 12-storey office building in Tokyo’s Toyosu district, near a venue for the 2020 Tokyo summer Olympic Games. It also owns a 9-storey office building in Tokyo’s posh Aoyama district.
Aetos has hired Mitsubishi UFJ Morgan Stanley as a sale adviser. A spokeswoman for the bank declined to comment.