By Junko Fujita
TOKYO (Reuters) - U.S. investment funds Blackstone Group (N:BX), Fortress Investment Group (N:FIG) and Elliot Management are among those shortlisted for the second round of bidding to buy Japan's Simplex Investment Advisors in a deal that could top $1 billion (640 pounds), three people with knowledge of the transaction said.
Japanese property firms Hulic Co (T:3003) and Kenedix Inc (T:4321) were also shortlisted, the sources told Reuters, asking not to be identified because the process is not public.
The second bidding round is expected to close by the end of this month, they added. U.S.-based property investment fund Aetos Capital Real Estate has put Simplex, a real estate asset management firm, up for sale.
Simplex owns Simplex REIT Partners, the manager of real estate trust SIA Reit Inc . Some of the bidders may sell the REIT after they win the bid, the sources said.
The bidders may team up with others for the second bid, after bidding alone in the first round, they added.
A Simplex official said the firm was not in a position to comment, while an Aetos official declined to comment.
The deal comes at a time when foreign investors are looking for investment opportunities in Tokyo where property values are expected to rise further.
Bidders are attracted to a hotel that Simplex owns near Tokyo Disney Resort and a 12-storey office building in Tokyo's Toyosu district, close to a venue for the 2020 Tokyo summer Olympic Games, the sources said.
Hotels have become the most attractive sector among other property segments, given surging demand for accommodation with Japan drawing a record number of foreign tourists helped by a weak yen and easier visa requirements for some Asian countries.
Investors also believe growth in rents for office buildings in Tokyo will continue as the economy recovers.
Aggressive monetary expansion policies deployed under Prime Minister Shinzo Abe have driven up the value of assets including properties, fuelling an investment boom.
Tokyo office rents have climbed to their highest since April 2011, but property analysts say the growth is small and will be capped by imminent launches of new office towers.