Abu Dhabi Investment Council is expanding its interests in Japan as part of a high-profile deal that includes the former AIG chief executive Hank Greenberg, according to reports.
The investment council, an arm of the Abu Dhabi Government, is part of a consortium of investors that is poised to buy a US$1 billion office block in central Tokyo on the back of hopes of a long-awaited market recovery and a vote of confidence in the financial policies of the Japanese prime minister Shinzo Abe.
If it goes ahead, the deal to buy the 31-year-old largely vacant 102,300 square metre Shiba Park Building would be the biggest foreign investment deal in Japan's property market since the global financial crisis in 2008.
According to Reuters, the deal is being put together by the private property company Asia Pacific Land and investors include the United States-based insurance firm CV Starr, which is run by Mr Greenberg, as well as the Japanese property specialist Secured Capital Investment Management.
Banks including the Japanese arm of Commerzbank, as well as Mizuho and Shinsei, are reported to be providing a total of $916.9 million to finance the deal, while the investors are said to be injecting $101.9m each via equity, unnamed sources told Reuters.
Abu Dhabi Investment Council (Adic) declined to comment on the deal when contacted by The National yesterday.
The move follows news last year that Adic had teamed up with the Australian-listed property investor Goodman to invest about $1bn in logistics warehouses across Japan.
Adic is no stranger in overseas property markets. In 2008, the fund made headlines by acquiring a stake in the Chrysler Building in New York.
After years of falling rents, signs of life are returning to the Tokyo office market, boosted by the prime minister's economic policies.
According to the property broker CBRE's latest report, rents for prime offices in the capital have already started to increase and are set to grow from 6 to 8 per cent over the coming year and from 10 to 15 per cent over the coming two years.
Tokyo's stock market has emerged as one of the world's top-performing bourses after Mr Abe came to power in December and has since pursued "Abenomics" - pro-spending policies and aggressive central bank easing that has pushed down the yen.
In Abu Dhabi, meanwhile, the latest report on the capital's office market makes grim reading for landlords. According to research published by Knight Frank yesterday, vacancy rates rose to nearly 37 per cent during the six months to June and are set to increase to more than 40 per cent next year as dozens of new office towers come to the market.