The weight of new capital from Japan targeted at real estate will put pressure on European yields in the next few years, says a senior Japanese investment adviser.
The weight of new capital from Japan targeted at real estate will put pressure on European yields in the next few years, says a senior Japanese investment adviser.
Japan's three largest public pension, savings and insurance funds will attempt to invest $130 bn over the next decade in "alternative assets" including real estate, much of it in overseas, Shuji Tomikawa, president of Mitsui Fudosan Investment Advisors, told the Urban Land Institute conference in Berlin last week.
The 'three whales', GIPF, Postal Savings and Postal Insurance will have to prioritise Europe and the US for their real estate debuts outside Japan and the sums allocated are so large that 'there will be pressure on yields in Europe or anywhere', he said.
Tomikawa said that ‘the three whales’ will start investing overseas in real estate during 2018, initially indirectly.
'We call them the whales because they are so big and Japan is too small a pond for them', he explained. ‘So they will come to Europe and to the US naturally'.
He said GIPF has $1.4 tn of assets, none in property, 'and they will try to allocate up to 5% which is $70 bn.' Postal Savings has $1.8 tn of assets, ‘and are not big in real estate. They will try to allocate up to 3% which is $54 bn.’ And Postal Insurance has $720 bn of assets, none in real estate, and it will try to allocate up to 1% to real estate, or $7 bn at the maximum.
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