Houston, Texas-headquartered real estate investment manager, Hines, has announced the appointment of three senior executives to bolster its Japan capabilities, as the firm eyes opportunities in the domestic logistic sector in particular.
Kiyohito Motoyama joins Hines as director for logistics and industrial, while Saiko Ishii becomes director of asset management of acquisitions, and Ryo Shiino director of compliance. All three positions are newly created, the announcement sent to media via email explained. The new executives are based in Tokyo and report to Jon Tanaka, senior managing director for Japan.
“At Hines, we are seeing significant opportunities and trends in the Japan’s logistic sector during the current macroeconomic climate. With a stable economy, strategic location, and robust market demand, Japan offers an attractive environment for development and investment in logistics facilities,” Tanaka told FinanceAsia.
Elaborating on factors driving opportunities in the logistics and asset management sectors, Tanaka pointed to the rapid growth of e-commerce in Japan, which is fueling demand for localised warehousing solutions; and adoption of onshoring strategies by large manufacturing corporates, including Panasonic and Toyota Motor, to improve their supply chain resilience.
Additionally, Japan’s emphasis on quality and safety in its food industry has driven demand for leasing modern cold storage facilities, he said.
Motoyama, who will lead business development efforts in the logistics and industrial sector in Japan, brings 15 years’ experience in the Japanese real estate market and was most recently a senior manager at Mitsubishi Jisho Investment Advisors, and earlier, a manager at Mitsui & Co Logistics Partners.
Meanwhile, Ishii will lead acquisitions and developments for asset management across different sectors within Japan. She was most recently chief investment officer of Prologis REIT Management, where she oversaw acquisitions and dispositions, leasing, and portfolio management of the REIT’s JPY865 billion ($6.2 billion) logistics properties portfolio.
Shiino will in turn support the firm’s the compliance activities across Asia Pacific. Her most recent position was compliance officer for Heitman across Japan, Hong Kong, and South Korea, and she earlier worked in the audit and advisory teams at Ernst & Young and PwC.
Tanaka added that post-Covid-19, real estate investment in Japan has experienced a shift in focus from defensive sectors, such as multifamily and logistics, to the office sector.
Transactions in this space amounted to JPY605 billion ($4.4 billion) in the latest quarter, a 135% increase year-on-year (YOY). Additionally, the number of “large transactions” (JPY10 billion or higher) doubled from Q1 2022, he said, citing data from CBRE.
“With the full re-opening of the borders to inbound tourism in this month, some investors are pursuing opportunities in the hotel sector, anticipating average daily rate (ADR) growth due to strong demand from inbound visitors and the weak yen,” Tanaka added.
Hines currently manages over $1 billion in assets in Japan, across the residential, industrial, and office sectors and in six cities. Since 2022, it has grown its multifamily platform from scratch to 16 assets.
Investor eyes on Japan
International investors, including Warren Buffet, have expressed optimism about the potential for robust returns in Japan amid improvements in corporate governance. The nation’s stock market indexes are at their highest in over 30 years.
Japan is now the only G7 economy with negative real interest rates.
Recent GDP and inflation data suggests that the Bank of Japan could soon begin to ease its long-standing yield curve control (YCC) policy.
Tanaka noted the high liquidity in Japan’s real estate market and cited data from CBRE that showed commercial real estate investment in Japan had surged by 102% YOY to JPY1.27 trillion in the first quarter of 2023.
“Domestic investors accounted for over JPY500 billion of the quarterly total – the first time they have done so in nine years. In response to the cost-push inflation, rank-and-file employees are enjoying wage growth, and as such, Japan may be emerging from its deflationary slumber of past years,” he added.
Tanaka also highlighted a surge in domestic production of semiconductors in Japan.
Recently, Micron announced plans to invest around JPY500 billion to expand its advanced chipmaking facility in Japan, with support from the Japanese government, while TSMC is planning a second, JPY1 trillion semiconductor manufacturing operation on Kyushu island. The news follows an order by China to stop its domestic infrastructure firms from buying from US-headquartered Micron.
“As Japan strengthens its position in the global semiconductor market, Hines anticipates a surge in demand for development of R&D and industrial logistics facilities,” Tanaka said.
As of December 31, 2022, Hines globally manages a total of $96 billion worth of residential, logistics, retail, office, and mixed-use assets across 30 countries.
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