Japanese funds betting on high yielding European real estate

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Japanese institutional investors’ appetite for European real estate funds is rising as attractive yields and lower hedging costs lure them away from a potentially peaking U.S. market, according to Tokio Marine Asset Management Co.

The $57 billion money manager saw inflows to its overseas real estate equity funds soar “multi-fold” to around 200 billion yen ($1.9 billion) at the end of March from a year ago, as demand from Japanese pensions and other institutions surged, said Shinji Kawano, head of its overseas property investment department. Total assets under management were little changed over the same period, he said.

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