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Alpha fund sells Shanghai International Plaza to LaSalle; price said to be 42,000 yuan psm

ALPHA Asia Macro Trends Fund II (AAMTF II) has sold Shanghai International Plaza, an office-and-retail property, to LaSalle Investment Management.

AAMTF II sold the property through its wholly-owned entity Bravo (II) Pte Ltd; LaSalle made the acquisiton on behalf of LaSalle Asia Opportunity V, the fifth in its series of closed-end, pan-Asian opportunistic funds.

Both sides did not disclose the price. However, BT understands the property changed hands at around 42,000 yuan (S$8,755) per square metre of gross floor area (GFA). Based on the property's 56,000 sq m GFA, this would work out to around 2.35 billion yuan.

AAMTF II is managed by Alpha Investment Partners (Alpha), the private fund management arm of Keppel Capital Holdings.

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In a news release by Keppel Corporation, the parent of Keppel Capital, Alpha's chief executive Alvin Mah said: "For Shanghai International Plaza, our rigorous value creation initiatives have allowed us to realise an internal rate of return (IRR) of close to 20 per cent on the sale of the investment."

AAMTF II acquired the property in 2014 for about US$133 million and repositioned it to attract quality and more diversified tenants through active value-adding and enhancement works - including upgrading the main lobby and common areas of the office tower to make it more spacious and modern, as well as incorporating a concierge to better facilitate visitor access to the office tower.

Located at the junction of two major thoroughfares, Sichuan North Road and Wujin Road, the property comprises offices spread across 24 storeys as well as a six-storey retail podium.

News of the asset's divestment follows Alpha's successful sale of another mixed-use property in Shanghai, Life Hub @ Jinqiao, in 2016, which generated an IRR of over 20 per cent.

"The successful completion of both transactions exemplifies Alpha's approach to investing for our value-add funds and underscores our strong track record in the Shanghai market.

"In the AAMTF series, we seek to create value and drive returns through innovative asset management and proactive leasing strategies," said Mr Mah.

The AAMTF series is designed to ride on mega trends driving long-term growth in the Asia-Pacific, which include urbanisation, growing consumerism and intra-regional tourism. AAMTF III, the third value-add Pan-Asian fund in this flagship series, was launched in 2016 with a target size of US$1.0 billion. As at end-2017, Alpha has raised over US$560 million.