Singapore giants increased their investment by 770 billion yuan, and Hong Kong capital bought 29 buildings in Tokyo. In 2024, foreign investors are still spending high-profile money to "grab houses" i

The rich are taking their money to Singapore, and Singapore is taking their money to share the pie with Japanese industries. Especially in real estate. Last year, Singapore became the largest investor in Japanese real estate, with inflows of nearly $3 billion, the most of any country.

 

Rich people go to Singapore with money, and Singapore also throws money at Japan's industry to "share the cake";

Especially in real estate.

Last year, Singapore has become the largest investor in Japan's real estate sector, with an inflow of nearly $3 billion, ranking first among other countries.

 

 

 

However, they still feel wanting more. This year, Singapore continues to increase its firepower, enter Japanese real estate, and tap the market potential of Japanese property market that has been silent and low-key for many years.

 

 

Just last week, according to the Nikkei newspaper, Singapore's Capital and Investment will increase its exposure to Japanese real estate.

In the next three years, the total amount of investment funds will be expanded to 2.7 times the current level, reaching 770 billion yen.

 

 

CapitaLand is one of the largest real estate groups in Asia, and the financial strength of Capital and Investment should not be underestimated. As of February, together with listed and unlisted funds, the scale of real estate funds invested by Capital and Investment has reached 100 billion Singapore dollars.

In the past, the fund's investment in Japan was only about 2.4 billion Singapore dollars, accounting for only 2%. The implication is that there is still sufficient ammunition.

Hideto Yamada, general manager of CapitaLand's Japan business, stressed in an interview: "We plan to further expand investment in broad 'accommodation facilities' such as serviced apartments and rental apartments in Japan."

The goal is to increase investment in Japan to S $6.5 billion within three years, more than twice the original amount. The fund plans to invest in accommodation and logistics facilities in Japan to obtain stable investment income.

Related projects in the accommodation field, which is defined as a key area by Capital and Investment, have already started. The main purpose is to promote lyf, a shared serviced apartment, which is very popular in Singapore, to Japan.

 

As-built plans for lyf Shibuya

 

In 2021, CapitaLand opened its first lyf in Fukuoka, Japan, the lyf in Ginza, Tokyo will open in 2023, and the "lyf Shibuya" in Shibuya, Tokyo will open as early as the end of 2024.

These apartments each have 100 to 200 rooms. Adhering to the concept of providing community (common society) for residents, they have set up workplaces such as shared offices and spacious shared spaces.

The target audience of the shared serviced apartment "lyf" includes millennials (people born around 1980 ~ mid-1990s) who are used to using shared offices, "Workcation" practitioners who combine vacation and work, and tourists visiting Japan who have short-term stay needs.

 

lyf popular with millennial travelers (Ginza lyf)

 

You can imagine Japan's current demand for tourist accommodation, and Japan's adoption of the digital nomad visa system this year, which are huge market potentials.

In addition to the accommodation industry, CapitaLand also became a fund of 16.5 billion yen to invest in logistics facilities in Japan, and acquired real estate in Osaka Prefecture and Kanagawa Prefecture in February;

In addition, we are also considering investing in and developing data centers in Japan that have surged in demand due to digitalization, and also considering acquiring Japanese or foreign investment funds for Japanese real estate...

The main player doesn't fall behind anywhere, and it seems that he is determined to become a big bookmaker of Japanese real estate investment.

Only by not putting eggs in the same basket can you hedge risks. At present, we should have a concept of "asset allocation in global core first-tier cities". Japan, especially Tokyo, has the lowest threshold for real estate investment among super-first-tier cities in developed countries;

 

Now that you know what to invest in, you should also understand why you choose to invest in Japan.

CapitaLand's portfolio has previously been focused on China and Singapore. Since the early 2000s, CapitaLand has seen China as the center of overseas expansion.

As of February this year, about 31% of CapitaLand's fund balance was invested in China, second only to Southeast Asian countries including Singapore (42%).

 

 

However, time has changed, and in order to achieve sustained growth, it has become urgent to go overseas and invest in other regions, so CapitaLand has set its sights on the Japanese real estate market;

It can be understood that CapitaLand has accelerated its pace in Japan in order to diversify its asset portfolio allocation.

In fact, not only CapitaLand, but also Singapore companies are increasingly interested in Japanese real estate.

According to data from Jones Lang LaSalle (JLL), from January to June 2024, foreign real estate investment in Japan will reach approximately US $3 billion. Among them, companies in Singapore have prominent investment, and many projects are related to tourists visiting Japan.

 

For example:

Singapore's TPC, as the holding company of shipping giant Wanbang Group, recently acquired a luxury hotel in Furano, Hokkaido, Japan. This is TPC's third real estate acquisition in Japan in the past year and a half; In 2023, the company has planned to develop hotels on the land acquired in Izu Peninsula.

Singapore Real Estate Investment Corporation (Patience Capital Group), which plans to develop large-scale resorts on the border between Niigata and Nagano prefectures, also acquired Madara Plateau Ski Resort in Nagano and Myoko Suginohara Ski Resort in Niigata in 2023. In June 2024, the company also decided to acquire the golf course business in Nagano City.

 

 

Singapore has never been the only one aiming at investing in Japanese accommodation facilities.

In April, Hong Kong's Gaw Capital also partnered with Hong Kong-based Alisa Partners to acquire 29 rental residential buildings in Tokyo. In addition, investments from companies in the United States and Canada are also very prominent, and the Middle East Qatar Investment Authority, which has been frequently searched not long ago, is also actively "betting heavily" on Japan.

 

 

And the reasons given by these investment giants are very similar.

For example, Singapore CapitaLand does not want to rely too much on the single market and pursues the diversification of the real estate asset investment market, while the investment purpose of Qatar Investment Authority is to diversify the economy and get rid of its dependence on liquefied natural gas (LNG) and oil.

From all kinds of single to pluralism, as far as the current situation is concerned, they all tacitly chose Japan.

Hideto Yamada, general manager of CapitaLand's Japan business, emphasized two points in the interview:

1. The investment boom of overseas capital in Japan is not for the purpose of short-term buying and selling transactions;

2. The weakness of the yen is not a trigger for investment, but only an investment that helps to make big purchases;

 

 

According to Yamada's analysis, foreigners (or capital) are certainly keen to invest in Japan. First of all, due to the high interest rate level caused by interest rate hikes in European and American countries and some geopolitical risks, it is not easy to find new investments;

What's more, many investors and organizations believe that the proportion of investment allocation of Japanese real estate is still relatively low in the whole asset portfolio, and there is a large room for investment expansion;

We are also optimistic about the large-scale outbreak of Japanese tourism and the future development of industries such as the development of digital technology on related upstream and downstream real estate fields, such as accommodation and vacation, and data centers;

The depreciation of the yen and Japan's long-term low interest rate are the last east wind.

 

 

Judging from various signs, the upsurge of global capital investment in Japanese real estate will continue, but it is also foreseeable that the competition for promising and potential real estate transactions in Japan will become more intense.

From the perspective of ordinary people, we only need to grasp a few "essences" through phenomena:

First of all, in pursuit of asset diversification, Japan can be the first choice when going overseas, and stable income is one of the advantages; With the depreciation of the yen, foreign capital did not flee Japan, but was used as a boost for investment (this is actually enough to explain many problems); Finally, more and more people will join the competition for good assets (houses), so we should hurry up if we should take action.

When the times are reshuffled, most of them need to re-evaluate the value of their assets, and they also need to look at the Japanese property market from a different perspective.

If you are also interested in Japanese asset allocation and want to know how to invest in different regions, different real estate types and different business types in Japan, or how foreigners apply for low-interest loans, please scan the QR code to contact WeChat below for one-on-one detailed communication and consultation to answer all your questions.