Land Of Rising Returns? KKR In Talks To Launch Real Estate Outfit In Japan
In yet another international foray, NYC-based private equity firm KKR is looking to the Land of the Rising Sun for some rising returns.
Japan's strong commercial real estate market has the private equity giant intrigued, along with the cheap debt—so cheap some banks are actually paying businesses to borrow from them, eFinancial News reports.
(Co-CEOs Henry Kravis and George Roberts pictured—they almost look like twins, don't they?)
Prime Minister Shinzō Abe—through the Bank of Japan—promotes policies to create and maintain a cheap debt market in order to push growth and demand, along with negative interest rates.
And KKR has been hooked—the firm plans to hire a senior dealmaker to identify key properties where it can establish a foothold in the country.
Japanese commercial real estate had a strong year in 2015—growth expanded in response to foreign demand for assets in mature Asian markets alongside robust domestic activity.
Vacancy rates hovered around 3.2% for prime Tokyo real estate in December 2015—down 1.2% quarter-on-quarter—and rental growth was up 1.7% from Q3 to Q4 2015. [eFN]