Brookfield seeks to buy more Japan property after US$1.6 billion in deals
The firm will focus on logistics, mixed-use complexes and hospitality assets
BROOKFIELD Asset Management said it plans to ramp up real estate investments in Japan after buying a stake in a landmark Tokyo hotel and a large plot of land for logistics development in deals worth a combined US$1.6 billion.
The Canadian investment firm took a stake in Gajoen, a mixed-use complex in the Japanese capital owned by China Investment Corporation (CIC) and LaSalle Investment Management. It also acquired one million square feet of land near Japan’s manufacturing heartland of Nagoya to develop a large warehouse. The two deals closed at the end of 2024.
The investments underscore a trend of increased foreign investor activity in Japanese real estate in recent years, buoyed by the weak yen and cheap financing. The return of inflation after three decades and a tourism boom in the country have also made certain assets such as hotels and apartments more attractive.
“You are going to see us doing a lot more in Japan,” Andrew Burych, a managing director and head of East Asia real estate for Brookfield, said. “Our pipeline is pretty good going into 2025.”
Brookfield is likely to spend more on deals in the country this year than the US$1.6 billion it invested in 2024, Burych said. The firm will focus on logistics, mixed-use complexes and hospitality assets.
Burych added that he also saw opportunities to do transactions with public Japanese real estate investment trusts that are trading below their net asset value, as well as private Reits whose shareholders might have liquidity needs.
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The volume of investment in Japanese real estate jumped 40 per cent in the first nine months of 2024 from a year earlier, and was estimated to reach five trillion yen (S$32 billion) for the year, according to Jones Lang LaSalle. It expects further activity by both domestic and international investors in 2025.
Brookfield has four real estate investment professionals in its Tokyo office, and people in other locations such as China and Singapore working on Japan deals, Burych said.
The Gajoen purchase was done on Brookfield’s balance sheet, while the acquisition of land in the Nagoya area is being made through Brookfield’s global opportunistic strategy, according to the US$1 trillion asset manager.
Brookfield will take over asset management of Gajoen, and plans to invest in renovating public spaces in the hotel and offices. It declined to disclose its ownership stake and the co-owners of the property.
CIC declined to comment. LaSalle did not respond to a request for comment.
CIC and LaSalle bought the Gajoen complex in 2015 from Mori Trust. It contains a 60-suite room luxury hotel with banquet halls and restaurants, and two office towers – the 19-floor Arco Tower and 16-floor Arco Tower Annex. The hotel is known for its Japanese gardens and use as a popular wedding location. It contains a historic 100-step stairway and several art-filled rooms that are marked as a cultural property by the Tokyo Metropolitan Government. Amazon Japan is the main tenant in the office buildings.
Brookfield will also spend about US$300 million to develop a 2.4 million square-foot warehouse on the Nagoya area land it purchased, which is located near a highway between Japan’s two major metropolitan areas of Tokyo and Osaka. BLOOMBERG
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