Hong Kong’s Gaw eyes more Japan property deals on TSMC push
HONG Kong-based private equity firm Gaw Capital Partners is keen on real estate deals in Japan’s western island of Kyushu, citing the opportunities that Taiwan Semiconductor Manufacturing (TSMC) factories currently being built there could bring to the region.
“We are looking in that area, obviously we believe that with TSMC, it would change the market a lot,” Isabella Lo, Gaw’s managing director and head of Japan investments, said in an interview on Wednesday (May 10). Gaw, which already manages US$3.8 billion of property assets in Japan, has just begun its search in Kyushu – a region where it has not made acquisitions before, Lo said, adding that she would be interested in developing a logistics property and buying residential real estate in the area.
TSMC is building an US$8 billion fabrication plant in Kyushu’s Kumamoto prefecture in partnership with a subsidiary of Sony Group that is expected to come online in late 2024, as the chipmaker diversifies its operations amid geopolitical tensions and chip shortages. The Taiwanese company is planning a second factory in Kumamoto for completion in the late 2020s, Nikkan Kogyo reported in February.
Kyushu is more known in Japan for its mountains, beaches and hot springs than the commercial activity that typically draws real estate investors to areas around Tokyo and Osaka. The opening of an advanced chip factory could bring investment to the region, and the Japanese government is providing subsidies for the project.
Gaw, which manages about US$35.7 billion of real estate assets globally, has been particularly active in Japan in the past year, attracted by the country’s weak currency and low interest rates. Lo said in August that the fund planned to invest US$3.5 billion to US$4 billion in Japan by mid-2024.
In the past six months, Gaw has purchased a portfolio of logistics properties, and bought the Hyatt Regency hotel in Tokyo in a joint deal with KKR. Lo said on Wednesday that the fund was not near its US$4 billion plan in terms of acquisitions, and hoped to do more deals in logistics, data centres and hospitality in the near term.
Gaw’s favourite Japan investment right now is hotels, as the weak yen can attract foreign tourists and keep domestic tourists home, generating strong demand. Still, there is a lack of good deals on the market and some properties for sale are too expensive, Lo added.
“In an inflationary environment, hotels is probably the best sector where you can increase your rates on a daily basis and not be locked into a long-term lease”, like with offices, she said. “You can actually increase your price.” BLOOMBERG
Share with us your feedback on BT's products and services
