StormHarbour Partners, led by former Citigroup Inc. bankers Antonio Cacorino and Fredrick Chapey, plans to expand property investments in Japan to meet rising demand from overseas investors.
StormHarbour Japan Ltd. plans to invest in several buildings each worth about 10 billion yen ($127 million), compared with about 1 billion yen it has made annually in the first two years since the unit started business in the country, said Michimasa Naka, who heads the Japan unit of the financial advisory firm.
Signs of a recovery in Japan’s real estate market are attracting investors seeking returns in a nation where property investments in major cities offer as much as 6 percent yield and those in the countryside with as much as 10 percent, Naka said.
“We’re seeing an increase in inquiries to invest in real estate in Japan from overseas clients,” Naka said in an interview in Tokyo. “The yield they are offering is quite attractive at the moment.”
Mitsubishi Estate Co. raised 11.2 billion yen to buy four properties in Tokyo for its private real estate investment trust, while Sparx Group Co. announced plans last month to start a property fund in Japan after winning a mandate from a sovereign wealth fund in the Middle East.
Investments in Tokyo remain the most popular, followed by Fukuoka, a seaport city on the north coast of Kyushu island, because of its vicinity to the rest of Asia, Naka said.
Financing for property transactions are also becoming accessible, making it attractive for investors, Naka said.
“Banks are becoming very bullish on real estate financing,” he said. “Megabanks and regional banks are providing loans that allow us to put on some leverage. That makes it an attractive product for investors.”
The Tokyo office, which was the sixth to open worldwide, has been trying to match the success of the overseas counterparts by expanding its offerings beyond its main focus of selling credit-related products, according to Naka, who was head of global investor sales of Citigroup Global Markets Japan Inc.