Japanese Pension Funds to Boost Investment in Asia Pacific

• Proeksa Meas
• 31 December 2015
• Construction Focus
• 1419 Views

Based on the latest research from CBRE, an increase in allocation to real estate by Japanese pension funds in line with international trends could mean an additional $1.8 billion entering global markets in the coming years.

CBRE is predicting a significant boost in outbound real estate investments by Japanese investors in the coming years.. CBRE expects Japanese interest in overseas real estate assets to rise on the back of ongoing economic recovery. Investors are expected to increasingly diversify their investments both globally and across the Asia Pacific region.

Japanese investment into development opportunities in Asia

While the US remains the destination of choice for Japanese outbound capital, investment into Asia has likewise demonstrated firm growth, particularly into the emerging growth markets of the ASEAN region.

Japanese investments into oversees real estate have been increasing since 2011, as investors continue to seek higher yields and greater geographical and risk diversification. The favoured regions for Japanese investment are North America and Europe. In terms of investment for development purposes, Asia has been the major target destination.

In a survey of Japanese investors carried out by CBRE in January 2015, investor interest in developed countries in Asia as well as in emerging Asia was ranked at 39 percent and 24 percent respectively, accounting for 63 percent of total responses. In terms of development types, the industrial sector attracted 33 percent of investments, followed by apartments at 21 percent, and both retail and mixed-use sites at 19 percent.

According to Marc Giuffrida, Executive Director, Global Capital Markets at CBRE, “A number of groups looking for a more diversified path to growth have found significant opportunities in Southeast Asia’s favorable demographic segments. Furthermore, many of the preferred locations have long been part of Japan’s offshore manufacturing network; investors are hence able to leverage their long-standing market knowledge to identify unique opportunities and potential demand for new development projects?”.