European fund to invest 300 billion Yen in Japanese real estate

German-based Patrizia AG is planning to seriously invest in the Japanese real estate market, aiming to operate 300 billion Yen in assets over the next three to four years.

Approximately 90% of Patrizia’s properties are located in Europe. In 2019 the investment manager entered the Japanese market with the acquisition of Tokyo-based Kenzo Capital Corporation and has already invested 30 billion Yen in the purchase of several rental apartment buildings. 

Their mandate is to expand the acquisition of rental apartment buildings, along with office buildings in suburban areas to cater to companies looking for satellite offices. There are also plans to partner with major developers for new building developments.

Japan’s relatively stable rental income and low cost of borrowing make it an appealing country for institutional investors, both domestic and foreign. According to JLL, Tokyo was ranked second worldwide in terms of cities attracting the most institutional investment in the first quarter of 2021. Osaka was in the 15th spot. 

Real estate prices have been hitting record highs due to the inflow of major investment funds, yet the market is still appealing as a low-risk, safe haven.

Source: The Nikkei Shimbun, July 20, 2021.

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