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Fund model draws Japanese capital to European property

Japanese capital is being drawn to Europe again, despite its more natural inclination towards investment in the US. Europa Capital partner Andy Watson explained that at the first close of the Europa Diversified Income Fund in Autumn 2020 both Europa Capital’s parent company Mitsubishi Estate Company and a Japanese institution were cornerstone investors.

Watson told Real Asset Insight’s Richard Betts that European fund model is currently more attractive than direct investment for Japanese investors.  In Europe, “there’s a certain risk-averse attitude to the health crisis here,” he said.

Paris-based Watson said that currently in France, as elsewhere on the Continent, domestic investors dominate, while international players that would normally comprise 30% to 40% percent of the investment universe are doing a limited number of deals and mainly for core assets.

Logistics and living are the dominant asset types but normally Paris offices are the backbone of the French investment market.

“We’re funneling a lot of capital into only 25 to 30 percent of a normal market and that’s distorting pricing,” Watson said.

Click on the video above to watch the full interview or listen to the podcast below.

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