Foreign property investors rediscover Japan

Several heavyweight international real estate investors have turned to Japan as the market continues to exhibit economic recovery and some compelling real estate fundamentals in the aftermath of last year's devastating earthquake.

The key to success for foreign investors depends on good local partnerships, a panel of experts on the market will tell PropertyEU's Japan Investment Briefing in London on 13 November.

'Tokyo, relative to US, European and other East Asian markets, has gone relatively unnoticed since 1989 as a source of real estate investment opportunities. That is now changing,' Professor Lawrence Longua, director of New York REIT Centre, will say in his keynote presentation.

Foreign investor attention is centred mainly on Tokyo, which is being seen as a safe haven for risk-averse capital at a time when US treasury securities are being regarded with caution and Europe continues to struggle with its sovereign debt crisis.

AXA Real Estate Investment Managers - Europe's largest real estate investor - recently launched a Tokyo office property fund (dubbed TOP) to invest in core/core plus properties in the Japanese capital. In parallel, Sumitomo Mitsui Trust Real Estate Investment Management, a wholly owned subsidiary of banking group Sumitomo Mitsui Trust Bank, created a fund based on domestic capital to co-invest alongside AXA's TOP.

An important attraction is that Japan's economy is experiencing impressive growth this year. The GDP forecast in the third quarter of 2012 has been revised upward to 3.1% from the 2.8% forecast by Deutsche Bank economists in the previous quarter, Professor Longua notes. 'This improvement reflects healthier than expected private consumption as well as the contribution of the latest supplementary budget for reconstruction initiatives by the government.'

And while Japan's population is ageing, the Tokyo metropolitan area is expected to see growth which will keep its population above 35 million in 2025. The Japanese capital is also home to the headquarters of 48 of the top 500 global companies, more than London (17), Paris (19), New York (18) and Beijing (44).

Ryuhei Mori, head of global marketing, Xymax Corporation, will also tell the investment briefing that Japan provides long-term stability and that the impact of the earthquake was limited. Rent decreases and vacancy increases have slowed down and the population of major cities still continues to grow.

'Toyko's office market is still attractive but it is a unique market and to succeed as a foreign investor you need a good local partner,' Mori says.

Other panellist include Richard Barkham, head of global research at Grosvenor and Peter Hobbs, senior director at IPD.

Click on the link below to register for the event