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SEPTEMBER 1, 2022

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How REITs are benefiting from the M&A wave

by Sigrid Zialcita

Although the Asia Pacific region’s REITs were not spared the unprecedented impact of the pandemic, the sector has recovered from its trough, with valuations gradually retraced to pre-pandemic levels. In the wake of the crisis, however, mergers and acquisitions of the region’s REITs have accelerated. KKR became the latest global investor to home in on the region’s REIT market after acquiring one of Japan’s largest REIT managers, Mitsubishi Corp-UBS Realty (MC-UBS) for $2 billion. The move followed Warburg Pincus–backed ESR’s completion of the $5.2 billion merger deal for ARA Asset Management in January this year.

A scaled-up REIT is able to compete more effectively for quality assets, achieve greater trading liquidity and access a wider pool of institutional investors. This could potentially lead to a more competitive cost of capital for the merged vehicles.

The protracted pandemic has also sparked an urgent need to diversify across geographies and asset cla

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