Taubman in Asia
May 1, 2005 12:00 PM, David Bodamer
Taubman Centers is teaming up with Morgan Stanley — and hiring one of the financial services firm's top executives — to greatly expand its development role in Asia. The regional mall REIT hired Morgan Parker, a Morgan Stanley vice president based in Tokyo who oversaw Morgan Stanley Real Estate Fund's retail investment and management business in Asia. Parker will run the newly formed Taubman Asia subsidiary, headquartered in Hong Kong.
Taubman took its first steps overseas a year ago when it signed on to be the exclusive retail developer for the $20 billion New Songdo City project, a massive Korean development that will eventually house 250,000 people and have about 100 million square feet of commercial real estate, including 10 million square feet of retail. “New Songdo is our first order of business,” Robert S. Taubman, chairman, president and CEO of Taubman Centers told Retail Traffic. “But together with Morgan Stanley, we expect to be looking at a number of projects throughout the region. We expect to find opportunities that we'll capitalize on.”
Taubman declines to identify other potential Asian developments, but points to Parker's experience in the region as key to finding deals. Parker has a deep knowledge of property markets in China, Japan, Taiwan and Indonesia. His connection to the Morgan Stanley Real Estate Fund also puts Taubman in position to tap in to the fund as a joint venture partner. (Morgan Stanley Real Estate Fund is also an investor in New Songdo City and Morgan Stanley as a whole owns about 8.4 percent of Taubman's outstanding shares.)
Taubman plans to “limit its financial exposure” on any Asian investments and rely on Morgan Stanley, or other private equity funds, to invest in the developments. “We won't rush anything,” says Taubman. “But it's quite possible that this office can grow quickly: MSREF is an international fund. They have 2,500 people on the ground in Asia and have invested over $10 billion. They have done very little on the retail side. I think that their expectation is that with us they will do more.”
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