Property in the North Asian nation has been attractive to foreign funds because borrowing costs still remain low
[TOKYO] Goldman Sachs is raising a Japan real estate fund, targeting around US$500 million for property deals in the country, according to sources with knowledge of the matter.
The New York-based firm has been pitching investors in recent months for the fund, capitalising on a resurgence in the local property market fuelled by low borrowing costs and a weak yen.
The fund will deploy a value-add investment strategy, which typically seeks returns in the mid-teens, and will focus on data centres, logistics, residential and hospitality assets, said one of the sources, who asked not to be identified because the matter is private.
It’s aiming for its first close by the end of March, the source added. Goldman has invested in Japanese real estate deals in the past, but mostly on its own balance sheet.
A Tokyo-based spokesperson for Goldman Sachs declined to comment.
Japan-focused funds have been drawing global investors in recent years, in contrast with other markets where persistently high interest rates and geopolitical uncertainty have weighed on sentiment. In September, Morgan Stanley said that it raised 131 billion yen (S$1.1 billion) for a Japan real estate fund.
Property in the North Asian nation has been attractive to foreign funds because borrowing costs still remain low relative to other developed markets, even after the Bank of Japan raised rates to the highest level in 30 years. Investors with dollar funds can also get greater value from assets due to the yen’s depreciation.
KKR and PAG agreed last month to buy some of beermaker Sapporo Holdings’ real estate business in a deal valued at 477 billion yen, one of Japan’s largest property transactions in 2025. Blackstone announced a deal in December worth more than 100 billion yen to buy a logistics facility in Tokyo.
Japan’s real estate market saw investment volume grow 22 per cent year on year in the first three quarters of 2025 to 4.7 trillion yen, according to data from Jones Lang LaSalle. Global property investment volume climbed 21 per cent in the same period. BLOOMBERG
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