Why Investors Should Focus on Japanese Real Estate Interview with: Hitoshi Maehara, Chief Executive Officer, Tokyu Land Capital Management

1. Interview with: Hitoshi Maehara, Chief Executive Officer, Tokyu Land Capital Management
“Japanese real estate is on the path to recovery. Compared to other countries in the region, real estate in Japan is undervalued and often the last resort for cross-border real estate invest- ments, but that will soon change. Private wealth managers need to come to Japan to see the assets directly,” advises Hitoshi Maehara, Chief Executive Officer, Tokyu Land Capital Management.
Tokyu Land Capital Management is a real estate investment fund manager at the marcus evans Private Wealth Management APAC Summit 2014, in Kuala Lumpur, Malaysia, 27 - 29 October.
What value can Japanese private real estate add to a private wealth portfolio?
At the moment, Japanese real estate is devalued, due to the 20-year long deflation in the economy. Compared to the fundamental value of Japanese real estate, Japan is the last resort for real estate investors.
The value of properties in Singapore, Hong Kong and some other large Asian cities has risen dramatically in the last five years ago. This trend is just
beginning in Japan, but currently it is at the lowest level compared to the rest of Asia.
What do wealth managers struggle with, when it comes to investing in Japanese real estate?
In general, the market enjoys a large number of investment targets in the office, logistics, retail and residential sectors. For commercial real estate investment, Japan has been ranked the second largest investment market in the world after the US. At the same time, we enjoy very deep liquidity, good banking facilities and a relatively sound banking system offering a good loan rate for potential real estate investors. That means there is a good variety of properties to choose from.
However, in Japan there is strong domestic competition between pension funds, insurance companies and financial institutions. It is not so easy for private wealth investors from elsewhere in Asia to encounter a good investment opportunity in Japan. They need to work with a reputable and established asset manager based in Japan who can offer them a variety of opportunities in this competitive marketplace, based on their prefer- ences.
What are your criteria for selecting assets for the fund?
Most domestic investors prefer residential assets, but traditionally they have been reluctant to accept the volatility of the asset itself. We have been offering these investors, who are mainly pension funds, residential investment opportunities for a long time now, and have stopped offering office investments as the cap rate has been reduced dramatically. Right now, we are concentrating on acquiring logistics real estate, which we believe offer a good return on investment.
It is not so easy for private wealth investors from elsewhere in Asia to encounter a good investment opportunity in Japan
Why Investors Should Focus on Japanese Real Estate

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About the Private Wealth Management APAC Summit 2014
The fifth annual Private Wealth Management APAC Summit is the premium forum bringing elite buyers and sellers together. The Summit offers regional SFOs, MFOs, wealth advisors, and international fund managers and consultants an intimate environment for a focused discussion of key new drivers shaping wealth preservation and investment strategy. Taking place at the Hilton Kuala Lumpur Hotel, Kuala Lumpur, Malaysia, 27 - 29 October 2014, the Summit includes presentations on strategic asset allocation and risk management, co-investment opportunities, family governance, lucrative alternatives to boost returns and more.
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About Tokyu Land Capital Management
Tokyu Land Capital Management Inc. (TLCM) is a fund and asset management company of private Japanese real estate funds. Tokyu Land Corporation (TLC), our parent company and among Japan’s largest developers, established TLCM in February 2007. We have organized and managed numerous funds (current AUM is approximately 370 billion JPY). We manage attractive office buildings, commercial facilities, rental residential properties and logistics centers. Based on expertise accumulated within the TLC Group, we are confident that we can meet investor needs.
www.tokyu-tlcm.co.jp/en
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To view the web version of this interview, please click here: www.pwmsummit.com/HitoshiMaehara