In 2017 the Japanese Government Pension Investment Fund (GPIF) issued its first ever call to private equity, infrastructure and real estate managers for competing on global and domestic allocations. This Japanese fund has $1.3 trillion of assets under management. According to JLL, the fund announced it would invest 5% of its portfolio in real estate and infrastructure, amounting to $65 billion! Given that GPIF is taking this approach, more Japanese pension funds and investors are likely to follow suit. The UK and particularly London will benefit from these allocations of capital. We should keep in mind that other major Japanese investors are already active in the UK market, such as Mitsubishi Real Estate, Mitsui Fudosan and NTT.
JLL also predicts that Korean investors will add weight to the broader push from Asia in 2018. These investors have held back from adding to their UK exposure in the aftermath of the referendum. However, given the UK market’s resilient performance and high pricing in other global markets, other Asian investors are expected to increase their exposure to the UK property market.