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Property

BentallGreenOak to invest up to $10bn in Japan real estate

Canadian investment company targets pandemic-hit office buildings and hotels

BGO believes Japan's commercial property market will bounce back once the pandemic peters out. (Photo by Kosaku Mimura)

TOKYO -- Canadian investor BentallGreenOak plans to invest up to $10 billion in Japan during the next two to three years as it expects high returns from a market that has been less roiled by the pandemic than the U.S. and Europe.

BGO has raised capital from American and European pension funds and other investors for a new Asia fund. Canadian insurer Sun Life is also investing direct funds.

The amount raised from investors is expected to reach $2.5 billion, of which 80% would be invested in Japan. But the Japan investment capacity is set to be up to $10 billion as BGO covers the difference with loans.

Foreign investors are increasingly looking to Japan. Asia-focused private equity firm PAG plans to invest up to 840 billion yen in the country.

BGO will focus on office buildings and other properties that companies put on the market. It does not expect a significant decline in office space demand in Japan -- a trend experienced around the world as the pandemic puts workers in their own homes and convinces managers that the arrangement works -- because Japanese residences are relatively small with poor information technology infrastructure.

In April, when Japan was under a state of emergency, BGO acquired an office building in Tokyo's Kojimachi district from real estate company Unizo Holdings.

BGO also plans to buy low-priced hotels and flip them after tourism demand recovers.

Among foreign funds, it has top-class investment records in Japan.

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