The Employees Provident Fund of Malaysia has made its first direct real estate investment in Japan, with the acquisition of a portfolio of core-plus logistic properties in Tokyo.
PERE understands that the five logistics facilities being sold by Mitsubishi Corporation changed hands for $116 million.
The private real estate fund management company, Diamond Realty Management, a subsidiary of Mitsubishi Corporation, will be the asset manager and also advise EPF on the acquisition, disposition and management of the portfolio.
Under the mandate awarded to Diamond Realty Management, the firm will continue to invest in core-plus logistics assets in greater Tokyo and selected cities in Japan on behalf of the fund.
PERE has further learnt that EPF would look to invest as much as $350 million to $380 million in total under the mandate. Mitsubishi Corporation would also contribute a minority share of equity in the deals.
Diamond Realty Management said in a statement that through the mandate, it aims to “preserve a stable income stream and also enhance rental income through active asset management including re-tenanting or leasing of vacant spaces as well as acquiring high quality tenants”.
EPF did not respond to requests for a comment.
In February this year, the fund also announced a joint venture partnership with the Goodman Group to develop logistics facilities with a total development value of RM 1.4 billion (€340.4 million; $386.4 million).
Mohamad Nasir Ab Latif, the deputy chief executive officer responsible for investments, said that the investment is part of EPF’s diversification programme to invest in inflation-linked assets.
“These asset classes were effective inflation hedging tools, befitting the fund’s long-term objectives as a retirement fund, and the EPF would continue to explore opportunities in real estate, infrastructure and natural resources in accordance with its Strategic Asset Allocation,” he said.
These investments fit in line with EPF’s strategy to expand its real estate holdings in continental Europe and Asia. In an interview with PERE last October, Latif spoke of plans of investing in France, Germany, the US, Japan and China. He also said that the firm’s first offshore office will be opened in London to monitor local opportunities.
As of December 31, 2014, real estate and infrastructure comprised 3 percent of EPF’s total investment assets and contributed RM 1.39 billion in investment income, an increase of over 22 percent from the income in 2013.