A unit of Canadian insurance giant Sun Life Financial says it will invest billions of dollars into the Japanese office market, betting on a post-pandemic rebound.
BentallGreenOak plans to double staff in the country and invest $10 billion in Japanese property in the next three years, according to Bloomberg.
As much as 70 percent of that money could go toward office properties in central business districts, said BentallGreenOak CEO Sonny Kalsi.
“We don’t think that work from home is going to be a big long-term trend in Asia overall, and in Japan specifically,” Kalsi said. “That’s part of the reason we are bullish on Japanese offices — more so than any other market.”
Other investors appear to agree. Investment in Japanese commercial real estate was up 27.6 percent in the first nine month of 2020 compared to the same period last year. Most other global cities saw a decline over that period.
Blackstone is among those investors. The firm recently paid $1 billion for a portfolio of predominately Tokyo office buildings.
The country has seen fewer cases of Covid-19 than many of its peers. As of mid-December, Japan has recorded 148 cases per 100,000 people compared to more than 5,000 cases per 100,000 in the U.S., according to CNN.
Kalsi said that working together in an office is an important part of Japanese business culture, so employees will want to return.
BentallGreenOak has spent around $968 million on Japanese properties this year and is working on a handful of other deals.
[Bloomberg] — Dennis Lynch