MUFG to Roll Out $680M Real Estate Fund in Japan

Industry Insights from Next Move Strategy Consulting

An executive from Japan’s largest banking group, Mitsubishi UFJ Financial Group, told Reuters that the company is preparing to launch a 100-billion-yen ($680 million) fund aimed at investing in Japanese real estate.

Reported exclusively by Reuters, the new fund marks the latest in a series of Japanese property fund launches this year, driven by rising real estate prices and expectations of further interest rate hikes by the central bank from current ultra-low levels.

MUFG Targets Underperforming Assets with New Real Estate Fund

“In a world with interest rates, investors’ expectations of returns are rising,” said Naokatsu Uchida, president of Mitsubishi UFJ Real Estate Asset Management, the unit leading the fund launch.

The upcoming fund, set to become the unit’s second-largest, will primarily invest in underperforming assets, aiming to enhance their value and market appeal. Its portfolio will center on mid-sized offices, residential properties, and hotels across Tokyo, Osaka, and Nagoya.

According to Uchida, around 30 billion yen in equity will be secured from institutional investors such as life insurers, banks, and corporations, while the remainder will be financed through debt. He added that marketing efforts are already underway, and initial investor feedback has been positive.

Separate from Earlier MUFG Fund and Growing Industry Activity

This new fund is distinct from the property fund announced in April by MUFG in partnership with Mitsubishi UFJ Trust and Banking, which aims to invest 100 billion yen in real estate over three years.

Adding to the momentum, other major players have unveiled similar plans. In July, Dai-ichi Life and Marubeni announced their intention to launch a 400-billion-yen domestic real estate fund, highlighting the growing wave of large-scale property investment initiatives in Japan.

Expanding Competition and MUFG’s Long-Term Growth Goals

In February, Orix announced the launch of a 100-billion-yen real estate fund, while Morgan Stanley is also in the process of raising about 100 billion yen in equity for a Japan-focused property fund, according to earlier Reuters reports.

Meanwhile, Mitsubishi UFJ’s real estate asset management arm had over 500 billion yen in assets under management as of end-August. The group has set an ambitious target to double this figure to 1 trillion yen by the fiscal year ending March 2030.

It has expanded its workforce over the past two years and now plans to raise staff numbers from 70 to 90.

Source: https://www.reuters.com/

Prepared by: Next Move Strategy Consulting