Goldman Sachs significantly increased its investments in the Japanese real estate market to satisfy a high demand, which was stable even in the face of financial uncertainty due to the coronavirus pandemic. More details continue in the article.
Goldman Sachs (GS), one of the chief financial services and investment banking corporations on the planet, has elaborated on its plans to invest $2.3 billion (250 billion yen) in the Japanese real estate market in 2022. As of 2021, GS already holds property investment portfolios worth over $1 billion on the Japanese market.
The company’s focus is to satisfy the demand for service centers, logistics and data hubs, and to answer the need for more facilities and factories. Commercial property aside, apartments and residential buildings are also of special attention, as the expansion of new infrastructure (jobs) will necessitate housing needs.
Investing on the Japanese real estate market
It is known that the Japanese real estate market was relatively stable compared to other countries during the 2020-2021 COVID period of the pandemic. The demand was high, occupancy and utilization rates were steady with little to no fluctuations. With low interest rates, the Japanese market is one of the most alluring in Asia; from consistent turnovers in investments, it has earned a top spot on the global property stage.
Goldman Sachs is one of Japan’s leading foreign investor firms. In 2008, an acute financial crisis nearly sunk all investments in Japan, with economic stability and levels returning last year. Collaboration with other overseas investors resulted in 140 billion dollars of assets in 2020 alone and encompassed a third of all real estate deals during the previous year.
Interest for GS in building new data centers and logistics hubs is due to the significant increase in market demand for communication and e-commerce services. Therefore, GS’s investment activity is planned to raise the prices on the Japanese real estate market, which will positively contribute to the reinvigoration of the local economy and national GDP.
In 2020, Goldman made a significant purchase of fifty-two thousand square feet in Osaka, with plans of turning it into a large logistics center by 2024. Another targeted aim is to buy property at a reduced rate from struggling landowners with large and stable tenants on their territory, like headquarters or factories, i.e., reconstruction of a building into a Faurecia Clarion Electronics base and repurposing space in Tokyo for Tiffany & Co.
It is projected that GS, as evidenced by the latest series of mergers & acquisitions, is preparing for even more significant investments in upcoming years throughout Japan and the world.
Goldman Sachs: short summary
Reference: Founded in 1869 in the US, Goldman Sachs is today a global giant in the financial & investment areas. It offers clients asset and equity management, commercial and investment banking services, M&A, brokerage, commercial banking and credit. As of 2020, it operates with over $2 trillion under its asset management umbrella, generated $9.5 billion net income (with operating revenue of $44.6 billion) and employs more than 40,000 workers worldwide. The company has six major headquarters around the globe. It is traded at NYSE, included in the S&P 100 & 500 indexes. It has various commercial & financial interests in thousands of companies around the globe, ranging from mining & oil to infrastructure and IT, including Ukraine real estate.