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MARCH 22, 2020

Atago Pacific Investment Partners acts as Advisor to Crow Holdings on strategic alliance with ITOCHU.

ITOCHU, 100 billion yen real estate fund in the U.S.

 ITOCHU will launch a real estate investment fund for multifamily housing in the U.S., aiming for ¥100B of assets within five years. ITOCHU entered into a business alliance with Crow Holdings (Texas), a major U.S. real estate company.  ITOCHU will collaborate with Crow Holdings on real estate development and fund formation. ITOCHU intends to develop facility as recipient of abundant Japanese money made available by long-term monetary easing.


There are various types of real estate funds such as a private placement funds or REITs. ITOCHU will decide what type of fund ITOCHU develops from now on. ITOCHU acquired a 354-unit apartment complex in Dallas, TX in order to incorporate into the fund as the first asset. ITOCHU is mainly involved in fund raising from Japan’s financial institutions and investors for Crow Holdings. ITOCHU has a subsidiary called Advance Residence Investment Corporation (“ARIC”), which operates a REIT for multifamily housing. ARIC has approximately ¥450B assets under management, making it one of the biggest REITs specialized in multifamily housing in Japan, if not the biggest. ITOCHU will leverage on ARIC’s know-how as it builds a real estate business in the U.S. 


Japanese players’ entrance into real estate fund business in the U.S. is quite common. Mitsubishi Corp has also started forming REITs of which asset size is about ¥160B.


In spite of corona virus problem on going currently, Itochu believes that would not affect enormously on U.S. housing market in mid to long-term, a couple of years span. The U.S. REIT’s size is six times as large as Japan’s on market cap basis. ITOCHU intends to develop “receptacle” for Japanese money which was made available by long-term monetary easing and is getting nowhere to invest otherwise.


Please follow the link for the original article in the Nikkei: https://www.nikkei.com/article/DGKKZO57075200R20C20A3EA5000/

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