European property latest lure for Japan funds
JAPANESE institutional investors’ appetite for European real-estate funds is rising as attractive yields and lower hedging costs lure them away from a potentially peaking US market, the Tokio Marine Asset Management Co has said.
The US$57 billion money manager saw inflows to its overseas real-estate equity funds soared “multi-fold” to around 200 billion yen (S$2.4 billion) at the end of March from a year ago, as demand from Japanese pensions and other institutions surged, said Shinji Kawano, head of its overseas property investment department. Total assets under management were little changed over the same period, he said.
“Japanese investors want to take risks on real estate but not on currency,” he said in an interview in Tokyo last week. “The appeal of the US is decreasing while Europe is gaining more and more attention now, given its big market size and attraction in light of lower hedge costs. There is also a wariness about the US property market peaking out.”