October 20, 2009
Sumitomo, AXA to start Tokyo property fund
(TOKYO) Sumitomo Trust and Banking said yesterday it will join hands with French insurer group AXA to set up a US$1.1 billion real estate investment fund to buy office buildings here.
Tokyo's office market was the world's most active in the first half of this year, as investors return to a market hit hard after the global credit crunch pushed down property values and squeezed financing.
AXA group's real estate investment unit, AXA Real Estate Investment Managers and Sumitomo Trust said they will seek 50 billion yen (S$768 million) in investment from global investors.
They will also seek about 50 billion yen in lending from financial institutions, a Sumitomo Trust official said. They plan to set up the fund by early 2010.
Other signs of growing investor appetite for deals in the Japanese property market, the world's second-biggest, include Prudential Financial's new licence for a commercial real estate finance business in Japan.
An executive from property broker and asset manager Cushman & Wakefield also told Reuters last month that Asian sovereign wealth and pension funds have started hunting for investment opportunities in Japan.
Sumitomo Trust's shares ended the morning session down 0.4 per cent at 490 yen while the benchmark Nikkei average lost 1.1 per cent.
Martin Koh/ Sherry Tang