Lendlease, pension fund target Japan with $1.1b investment vehicle
Lendlease has teamed with Dutch pension fund manager PGGM to pursue value-add opportunities across Japan’s logistics and office sectors.
The partnership is targeting to hold product worth $1.1 billion (¥120 billion).
Branded the Lendlease Japan Modernisation Partnership, it will focus on assets in Greater Tokyo and Greater Osaka, with the potential to be upgraded and repositioned.
Lendlease will hold a five per cent co-investment stake in the vehicle, with PGGM providing the majority of capital.
PGGM’s primary owner is PFZW(Pensioenfonds Zorg en Welzijn), the pension fund for the Netherlands’ healthcare and social work sectors.
Refurbs, extensions, conversions
The partnership will target industrial and office properties where active asset management can improve performance, including refurbishment, extensions, conversions and other repositioning works.
It builds on Lendlease’s investment activity in Japan, where the group is established across sectors including logistics and data centres.
Lendlease Investment Management chief executive Penny Ransom said Japan continued to present opportunities for investors seeking exposure to established real estate markets undergoing structural change.
“Japan remains one of the world’s most attractive real estate markets, underpinned by compelling structural opportunities in the logistics and office sectors,” according to the executive.
She added the partnership extended a value-add strategy Lendlease had previously pursued in the country (continues below).
“We are pleased to further extend on our longstanding collaboration with PGGM through this new partnership, which reflects our shared conviction in the long-term opportunities presented by the Japanese market,” Ms Ransom said.
The deal comes nearly two years since realestatesource.com.au reported Lendlease teamed with Japan’s Nippon Steel Kowa Real Estate (NSKRE) for an Australian build to rent portfolio starting with a Docklands tower.
Institutional capital partnership
PGGM senior director private real estate Jikke de Wit said the partnership reflected confidence in Japan’s real estate fundamentals and Lendlease’s ability to identify assets where operational improvements could unlock value.
“Our continued partnership with Lendlease reflects our confidence in both Japan’s long-term real estate fundamentals and Lendlease’s ability to identify and unlock value through active asset management,” she added.
PGGM has previously partnered with Lendlease across real estate strategies.
The latest vehicle adds to Lendlease’s investment management platform across Asia Pacific, with the group continuing to expand third-party capital partnerships alongside its development and project management operations (like the Nippon deal in Australia).
The initial focus on Tokyo and Osaka reflects demand for logistics infrastructure linked to population density, e-commerce and supply chain requirements, while office assets are being targeted for modernisation as occupier expectations evolve.
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