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Property fund chief remains optimistic about Taiwan's real estate growth prospects

CLSA's John Pattar, left, unveils the NT$7.06 billion-worth Asia Plaza, the largest property development complex in the Neihu Technology Park, at a ne...

CLSA's John Pattar, left, unveils the NT$7.06 billion-worth Asia Plaza, the largest property development complex in the Neihu Technology Park, at a ne...

Sometimes it takes an outsider to tell you that the grass is greener, not on the other side, but in your own backyard.
Property fund head John Pattar is one such "outsider." Despite the negative sentiments and "sagging" consumer confidence in the market, the executive says he is cheerful about Taiwan's growth prospects in the coming decade.
"Sometimes you need an outsider to give more confidence to the insiders," Pattar tells the Taiwan News.
"The same (thing happened) when Hong Kong was in very, very bad shape. (The) outsiders developed Hong Kong first. In Singapore, they were quite negative about their growth last year, and it took foreign investors to stimulate the economy."
Pattar, managing director of CLSA Capital Partners, looks at the big picture.
"What are the drivers for the next decade? If you believe Asia is very strong in the next 10, 15 years, and it will be a key to global growth, then you also believe in Taipei. Taipei, as a financial institution, is very important to the growth of Asia," he says.
Last week, CLSA Capital Partners gave Taiwan its vote of confidence. In addition to investing US$200 million into the largest foreign investment project in Taiwan's property market - the Asia Plaza in Neihu's technology park - the company is also ready to invest an additional US$500 million to US$750 million into Taipei's premium real estate marker, says the executive.
"We did a lot of studies on the economy and the strengths of (the Taiwan) economy, and we combined that with local knowledge. (All indicators) showed that this is the right time to invest (in Taiwan)," says Pattar.
Even the Taiwan government has enthusiastically welcome CLSA Capital's participation in the country's property market, he continues.
"We got a very, very strong 'yes' (from the government)," Pattar says. "We're very, very proud (of what we have accomplished). (It) went on schedule. We found a strong leasing demand in the local market, and we have excellent partners helping us manage it. The professional skills available to us also (exceed our) expectations."
Joining CLSA in July 2004 as managing director of CLSA Capital Partners-Property Fund, Pattar is directly responsible for the day-to-day management of Fudo Capital L.P., a property fund specifically targeting recovering Asian economies through direct investment in real estate. He is also acting as a member of the investment committee for Fudo. He has over 16 years of property-related experience in property investment, development, capital transactions and asset management in Asia.
Prior to joining CLSA, he was the chief investment officer of Lend Lease Real Estate Investments (Asia) running funds of US$1 billion in Asia.
Pattar has a Bachelor of Laws Degree from London University and a diploma in Property Investment from the Reading College of Estate Management.
The property fund head says he is gung-ho about CLSA Capital Partners' investment prospects in Taipei, one of the key Asian cities that has made it to his "Magnificent Seven" list.
"CLSA started the property fund three years ago, and the intention was for me to formulate a strategy, get the local people (local expertise), and start investing in assets right across the Asian region," he says.
"In my strategy, we will identify what we call the key cities and key areas that we want to invest in. I formulated what we now call the 'Magnificent Seven' strategy. We identified the key economic centers that will be the Asian cities of the future - Tokyo, Seoul, Beijing, Shanghai, Taipei, Hong Kong and Singapore."
Currently, Taipei, Tokyo and Singapore are CLSA Capital's primary targets, he adds.
"In Singapore, we've invested, in equity terms, US$150 million, and with debt, it's closer to US$350 million. In Tokyo, we are currently looking at US$100 million. We've also got for Beijing another US$100 million," Pattar says.
He describes CLSA Partners-Property Fund as a mid-sized fund.
"We are not that big. If you'd look at (our) competitors, they are three, four times the size of our fund," he says. CLSA Capital Partners' property fund amounts to US$430 million in equity terms, giving it the buying power of US$2 billion, Pattar continues.
The company seeks out attractive risk-adjusted returns for its investors, primarily by making direct investments in real estate, real estate-related assets, and operating companies with real estate-related activities in North Asia.
CLSA Capital Partners began to evaluate the 4,265-ping Asia Plaza project in Neihu in the first quarter of 2006, and confirmed the investment in the third quarter of that year. Construction of Asia Plaza is scheduled to be completed in July 2007, and operation is expected to start in August.
Working with a team of renowned architects, design firms, and management companies from around the world, Asia Plaza has been designed from the outset to meet the needs of the most demanding tenants, says the executive.
The complex is comprised of three towers of office buildings. Pattar proudly declares that one of the towers has already been pre-leased. Another office tower is currently under negotiation, he adds.
"The economy is strong, and the institutional market is growing. We also look at the availability of demand and supply, and we see now a shortage of supply of good quality buildings. That's why we invested in a brand new building," Pattar says.
"We see local companies doing well, we see a very strong export market, we see technology companies increasing in size. As the whole Asian market develops, we see Taipei as a part of that service technology base for North Asia. We are very confident that in the next few years, Taipei entrepreneurs will be playing a key part in North Asia's growth."
CLSA Capital Partners is allocating an additional US$500 million to US$750 million in Taipei's premium commercial property market in the next five to seven years, he notes.
"The US$200 million we've invested into this marketplace is just the beginning (for us). We believe that Taipei will continue to be a major institutional marketplace for many, many years to come," Pattar says.
"We're looking forward to the next five, seven years, and our intention is to allocate at least between US$500 million and US$750 million (for Taiwan's real estate market)."
That amount should get CLSA five more commercial properties in the city, he says. The property fund head is not interested in developing real estate outside of metropolitan Taipei.
"We like capital cities with a very strong base of financial and technology companies. We would like to find projects that are of the same caliber (as Asia Plaza). We like new buildings," says Pattar. "We're also looking at residential properties but there are less opportunities (for us in that space)."


Updated : 2021-05-07 00:15 GMT+08:00