Hong Kong-based Value Partners Group is to launch the first officially-sanctioned fund to invest in real estate investment trusts (REITs) listed in Japan.

The Value Partners Japan REIT Fund aims to capture income returns generated by Japanese real estate.

The Japan REITs market is the biggest in Asia, with a market capitalisation of more than ¥15trn (€906bn), and provides an average yield of about 4% per annum.

Value Partners said the Japanese REIT market was well diversified across offices, logistics, retail, hotel and residential sectors, allowing investors to construct a diversified portfolio.

Ricky Tang, head of client portfolio management at Value Partners Group, said: “Japan REITs, on a US dollar-hedged basis, have provided a strong risk-adjusted return historically and have relatively low correlations with other asset classes.

“Looking forward, the strong momentum of Japan’s economy could provide support for property prices, which could lead to potential capital gains for REITs.”

Vincent Ching, head of intermediaries, Asia-Pacific at Value Partners Group, said the launch of the fund was a “milestone” for the company to further diversify its product offerings.

The trust has been approved by the Hong Kong Securities and Future Commission.