BlackRock drives Japanese market
BLACKROCK, the world's biggest money manager, is helping to drive a revival in Japan's property market as investors bet Prime Minister Shinzo Abe's plan to sustain economic growth will boost real estate returns.
BlackRock is looking for investments outside of Tokyo this year as it seeks higher yields, said John Saunders, its managing director and head of Asian real estate.
Japan real estate investment trusts, or J-REITs, acquired properties worth 2.23 trillion yen (€16bn) in 2013, almost triple the previous year, after raising a record amount of cash from equity sales, according to the Association for Real Estate Securitization.
Real estate investment has climbed since Abe pledged to end more than a decade of deflation and the Bank of Japan eased monetary policy, sparking growth in commercial land values and a drop in office vacancy rates.
Acquisitions made by overseas investors will account for about 20pc of all transactions this year, up from 13pc in 2013, and commercial property sales may grow to the highest level since 2007, according to brokerage Jones Lang LaSalle.
"Japan is experiencing a bit of a renaissance right now," said Christian Mancini, chief executive officer of North East Asia at brokerage Savills Asia Pacific. "There is favourable policy movement that has restored sentiment. All of a sudden, the market is pricing that forward."
The Bank of Japan has pumped $546.3bn into the financial system since April, boosting business sentiment to the highest since 2007.
"When you have monetary easing, that is incredible because you suddenly put oxygen into a starved environment," Hong Kong-based Saunders said. He declined to comment on individual investments. BlackRock acquired private-equity property investment adviser MGPA last year to expand in Asia, including Japan.