Diamond Realty Management (DREAM), a wholly-owned subsidiary of Mitsubishi Corporation (MC), has launched a private real estate fund totaling 23.4 billion yen, exclusively focused on logistics facilities. MC also invests in this fund with other domestic institutional investors and domestic pension funds.

The fund invests in four logistic facilities in the Greater Tokyo Metropolitan area and one in Kyushu, all of which have long-term lease contracts with high credited tenants.

 

The investors in this fund include major domestic institutional investors, as well as pension funds. Debt financing is a combination of non-recourse loan and specified bonds targeting institutional investors (the bonds acquired Moody’s preliminary ratings on March 2, 2010). Despite the difficult economic situation, DREAM succeeded in obtaining competitive debt financing, thanks largely to the MC Group’s proficiency in managing logistic facilities and strong relationship with financial institutions.

 

Since its establishment in 2004, DREAM has launched several private real estate funds catering to both domestic and global institutional investors. Its assets under management total more than 230 billion yen and it has grown to become one of the leading asset management companies in Japan.

 

With Japan’s real estate investment market still laboring from the aftermath of the financial crisis, DREAM has recognized the need of potential investors for good-quality real estate backed by a stable cash-flow. DREAM plans to continue answering these needs by creating competitive private real estate funds.

 

Along with J-REIT, private real estate funds comprise one of the most important businesses for MC’s Industrial Finance, Logistics and Development Group, and the Group plans to expand this business further in the future.