JPMorgan, the third largest US bank, will invest more than $1 billion in Asian real estate over the next three years, reports Reuters, quoting a senior official from the bank. JP Morgan wants to cash in on a situation where the valuations are becoming realistic in the real estate markets of India and China. The real estate valuations have tempered down after the increased liquidity pressures on developers. There are also fewer options of finance available to the real estate developers.
The report quotes Bryan Southergill, the group’s Asia real estate head, as saying, “It’s a fantastic opportunity for us at a time when a lot of our competitors are scaling down because of difficulties accessing their balance sheet.” SoutherGill added that they would however adopt a cautious approach towards equity or mezzanine financing in these markets and would rather utilise this time of market consolidation to build long-term relationships with companies in which they would invest.
JPMorgan was alsoa $2 billion fund to invest in Indian infrastructure projects such as roads, ports. India’s real estate and infrastructure story continues to seek deep interest from global biggies. It was only early this year that Morgan Stanley unveiled its plans of deploying 20 per cent of its recently closed $4-billion global infrastructure fund in non-OECD markets like India and China.
In a related development, Merrill Lynch is also raising a Pacific Rim real estate investment fund to the tune of $2.5-3 billion. According to Reuters, the new fund will invest in different types of property across the Pacific Rim, including India, Australia, Japan and the rest of Asia.