CPPCC Member Guo Guangchang Attends NPC and CPPCC

Synchronize with Fosun Global Resources, Deeply Plow Japan Market

Resource:

Takuya Yamada has joined as CEO in March 2015. Mr. Yamada has over 30 years of experience in real estate investment management. During his tenor at AIG Global Real Estate Japan (“AIG”) and Invesco Global Real Estate (“Invesco”) after its acquisition of the former for over the past 16 years Mr. Yamada was at the helm of leading acquisition activities with more than 700 properties amounting to over JPY 1.3 trillion including a J-REIT foundation. Mr. Yamada was also instrumental in many of the property disposals. Mr. Yamada has very close connections with all major real estate companies, banks, trust banks and other asset management companies and his strong connections bring many off market deals to investors.

  As Japan’s leading real estate capital management company, IDERA Capital Management Ltd. (IDERA) joined Fosun family in 2014 and was merged into its global investment blueprint, making it an important showcase of Fosun Property’s global investment capabilities. In just two years, the company has completed such acquisitions as the TFT (the former Citigroup Center) and Shinagawa Seaside Park Tower as well as the triumphant acquisition of Olympic Village for Tokyo Olympics Games in 2020 – Harumi Island Triton Square Office Tower W, Tower Y and other prime office space. At the same time, in Yuyuan Tourist Mart’s acquisition of Hoshino Resorts Tomamu in Hokkaido in late 2015, IDERA played a definite role.

  How did IDERA achieve such an impressive record in a short period of time? How has IDERA changed since joining Fosun? Looking forward to the new opportunities in Japan related to the 2020 Tokyo Olympics, how will IDERA take advantages to seize these opportunities? With these questions in hand, I sat down with Mr. Takuya Yamada

  Question: Can you tell us about IDERA and your major ongoing projects.

  Yamada: To be brief, IDERA possess unmatched asset management skills, extensive fund management experiences spanning many years, and top-notch product development capabilities. In the Japanese real estate market that offers scale of developed economy, reliable legal system, public safety, full-fledged technology and environmental consciousness, IDERA has proposed various investment opportunities. Our attractive investment products and full varieties of services were delivered in a reliable and transparent fashion to our clients in the current investment climate.

  After joining Fosun, IDERA placed a greater emphasis on effectively combining Fosun’s global resources, such as insurance premiums, to successfully acquire Class-A office buildings, for example Shinagawa Seaside Park Tower, in the Shinagawa Seaside urban complex. We are now looking for steady medium-to-long-term income, not only analyzing property cash flows, but more importantly, taking into account the overall value of properties in the market as well as investment opportunities within the market cycle, the geographic positioning of properties, and also the value growth potential. In addition to office buildings, IDERA also focuses on hotels and resort properties, such as the investment of Hoshino Resorts Tomamu in Hokkaido last year.

  Question: Tokyo Olympics Games in 2020 will bring new opportunities for Japan’s real estate market. What’s your viewpoints regarding the trend in local market?

  Yamada: After the U.S. subprime mortgage crisis in 2008, Japan’s real estate market underwent a fairly long period of low growth. As the crisis eased and the economy began to gradually recover, investors have begun to return to Japan’s real estate market over the past few years. Today, the industry generally believes that Japan’s current market is approaching the apex of this recovery, which is also benefiting from the positive readouts of Tokyo Olympic Games in 2020. This momentum has drawn more attention to the Japanese market from outside investors. Even though rents in current real estate market are still not the same as price levels prior to the 2008 crisis, as far as the leasing market is concerned, rents and occupancy rates are already fairly high. IDERA also welcomes these new opportunities and challenges so that we can take advantage of our own core competency and explore additional investment opportunities.

  Question: What are the specific advantages of IDERA? What are the company’s next specific targets?

  Yamada: IDERA is rooted in its excellence and outstanding reputation in business that it has accumulated over many years. The company is committed to offering seamless services of asset management to investors from North America, Europe, Asia, and around the world.

  One highlight is IDERA’s excellent leasing capabilities. IDERA has its own team that is exclusively responsible for leasing, which is incredibly rare among local peers, because most of these companies outsource the work to third parties and then simply focus on asset management.

  IDERA’s leasing team focuses on exploring the potential property needs of its clients and promptly relays infrastructure improvements,

The company is committed to offering seamless services of asset management to investors from North America, Europe, Asia, and around the world.

  One highlight is IDERA’s excellent leasing capabilities. IDERA has its own team that is exclusively responsible for leasing, which is incredibly rare among local peers, because most of these companies outsource the work to third parties and then simply focus on asset management.

  IDERA’s leasing team focuses on exploring the potential property needs of its clients and promptly relays infrastructure improvements, effectively plans office building functional areas, and form connections in promotional leasing activities. For example, prior to our acquisition of the Shinagawa Seaside Park Tower, occupancy rates were lower than 30%. Afterwards, we quickly carried out leasing work and completely renovated the tower, adding modern facilities to meet different tenant’s needs. After 18 months, occupancy rates were already up to 95%, which is viewed as “full occupancy” primarily.

  In terms of performance and targets, IDERA discusses with Fosun group and Fosun Property to jointly assess last year’s achievements and decide on performance targets for next year.

  Question: Has IDERA made any changes after joining Fosun family? If so, can you share any of them with us?

  Yamada: IDERA has made many changes since joining Fosun. In terms of business, the majority of our investments were within mid-term projects. Now, we have many projects that are worth JPY 10-20 billion. You could say that our reputation and recognition has grown greatly in the industry.

  I also have deep feelings about changes in terms of corporate culture. IDERA has gradually transformed from a traditional Japanese enterprise into an enterprise with an international touch, including our corporate management system, human resources system, and a sense of responsibility and an entrepreneurial spirit that has taken root in every employee. These are all great changes.

  Question: What we see now with collaboration between Club Med and Tomamu is a great example of synchronizing Fosun’s internal resources. In your opinion, based on your experience working with Fosun Group, what are your thoughts on the necessity of internal resource integration?

  Yamada: For us, Fosun’s asset investments around the world are very precious resources, but how to effectively integrate them with our advantages and experiences within the local market is an important focus for the future. For instance, with Fosun’s investments in the fashion industry like Folli Follie, when new stores are planned to open in Japan, property buildings operated by IDERA would be a good option. Moreover, in the hotel industry, we also would like to consider how to integrate internal resources, such as Thomas Cook and other companies in the happiness segment. There are many other opportunities for collaboration in Japan’s market. It is our great desire to achieve internal resource synergy, and we hope that we can have more opportunities in the future to know Fosun’s overseas subsidiaries, strengthening our connections and nurturing possibilities for collaboration through our communications.