Global investment firm Blackstone Group is opening a real estate office in Tokyo to hunt for deals in Japan's booming property market, sources familiar with the matter said on Monday.
Blackstone is shifting property dealmakers from its other offices to Tokyo and has hired the head of private equity at Japanese lender Shinsei Bank, Daniel Fuji, to search for real estate deals in Japan, the world's second-largest real estate market, the sources said.
Tokyo's property market is growing at the fastest pace since Japan's bubble years while the average national land price rose for the first time in 14 years in 2006.
Blackstone is raising a $10 billion global real estate fund, one of the biggest ever. Part of this fund may be deployed in Japan. The firm, which floated on the New York Stock Exchange in
June, has been building a presence across Asia. Blackstone's first office in the region was established in Mumbai in 2005 to handle private equity and real estate investments.
Global property markets have been soaring of late, and dealmaking hit a record $382 billion in the first half of this year according to Jones Lang LaSalle. However, worries about a
worldwide credit squeeze have investors fearing a slowdown.
On a global basis, Japanese real estate has looked attractive given the relatively large
difference between real estate yields and long-term interest rates. Blackstone has shown interest in the Japanese real estate market before, having competed fiercely for 13 hotels auctioned off by All Nippon Airways earlier this year. It was eventually outbid by a 281.3 billion yen ($2.4 billion) bid from Morgan Stanley, a record price for a Japanese real estate deal.
A Blackstone spokesman in New York declined to comment and a Shinsei spokesperson was unavailable to comment immediately.