Foreign wealth funds turn to Tokyo property
Property prices are astir in Japan’s old city of Edo. Asia Unhedged says this shows that you should never say never …
Bloomberg reports that international capital is flowing back into Tokyo real estate. After 15 years of declining prices, two consecutive property price rises along with the Bank of Japan hinting it can expand J-REIT purchases as Japanese government bonds get harder to source means the traded property market in Japan stays well supported.
Global wealth funds are preparing to snap up more Tokyo properties to avail themselves of rising prices in Japan’s capital, one of the top officials country’s land ministry reportedly said.
“Long-term pension funds in the U.S. and Europe, particularly in Scandinavia, are looking to lift their positions” in Japanese real estate, Kisaburo Ishii, a vice minister at the ministry, said March 30. “They have been underweight Japanese real estate.”
Bloomberg said Norway’s $870 billion wealth fund is getting ready to buy properties in Tokyo after combing Asia for investment opportunities, Karsten Kallevig, head of real estate investments at the Oslo-based fund, said March 20. Commercial property prices in Tokyo rose 2.9% last year, after a 2.3% gain in 2013, as foreign investors, including Singapore’s sovereign wealth fund, GIC Pte, grabbed assets.
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