JPMorgan plans to invest more than $1 billion in Asian real estate over the next three years, hoping to fill a gap as Indian and Chinese developers crave funds and rival investors recoil from property markets.
The investment bank, which has fared better than some Wall Street rivals because of smaller exposure to US sub-prime mortgage investments, is using its special opportunities group to finance Asian property firms and their projects.
“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,” the group’s Asia real estate head, Bryan Southergill, said.
Many Chinese and Indian developers are struggling to complete ambitious projects because local banks have clamped down on lending to the construction industry and a stock market slump has closed off equity raising through initial public offerings. Foreign investors are also shying away from markets where risks, as well as returns, are traditionally high.
But because of a shortage of funds, developers are starting to offer plum deals. “Last year private equity players were clamouring for exposure in India and China but it was hard to get in,” Southergill said.
Source: Times of India