Morgan Stanley Real Estate Investing (MSREI), the private real estate investment arm of Morgan Stanley Investment Management, has announced the final close of its inaugural North Haven Real Estate Japan Strategy Fund I (JSF), raising JPY131 billion—approximately US$900 million. This total significantly surpasses the fund’s original target of JPY75 billion (around US$500 million), reflecting strong investor confidence in the firm’s Japan-focused strategy.
The fund’s investor base includes a mix of Japanese pension funds and financial institutions, alongside foreign sovereign wealth funds, highlighting broad international interest in Japan’s evolving real estate landscape. JSF is structured as a Japanese Yen-denominated closed-end fund and is designed to capitalize on several long-term structural trends in Japan. These include urbanization, increased international migration, a relatively high return-to-office rate, and the ongoing transformation of supply chains driven by e-commerce. Together, these factors are expected to support growth across the residential, office, and industrial real estate sectors.
JSF will concentrate its investments in major urban centers such as Tokyo and Osaka, as well as other key markets across the country. The fund aims to deliver attractive risk-adjusted returns through disciplined asset selection and prudent use of leverage. Its first acquisition was completed in March 2025, and approximately 8% of the fund has already been committed to residential properties.
With over 25 years of experience investing in Japan and more than $10 billion deployed in the country since 1998, MSREI brings market knowledge and long-standing relationships to the JSF strategy. And the fund’s launch comes at a time when Japan’s real estate fundamentals are strengthening, supported by inflation, wage growth, regulatory reforms, and favorable financing conditions.
KEY QUOTES:
“Japan has a positive macroeconomic outlook driven by inflation and wage growth, regulatory changes shifting corporate behavior towards efficiency, and attractive yield spreads with favorable financing terms. Against this backdrop, real estate fundamentals continue to improve, particularly for sectors supported by long-term structural tailwinds. With 25+ years of investing experience in Japan, we believe MSREI is well positioned to leverage its in-depth local market knowledge and strong access to opportunities through long-standing relationships to successfully invest JSF on behalf of investors.”
Yu Kawamata, Co-Head of MSREI Asia Investments and Head of MSREI Japan
“We are extremely pleased with the strong investor support for JSF both from existing and new investors who recognize and value MSREI’s long history and deep expertise in Japan, having deployed more than $10 billion of equity capital in the country since 1998. With domestic capital in Japan increasing allocations to alternative products, including real estate, and broader institutional investor interest in Japan, we believe JSF offers investors a differentiated country-specific investment solution that combines MSREI’s strong local investing capabilities with a unique global perspective delivered through managing over $50 billion of real estate assets globally and having the ability to leverage the broader Morgan Stanley franchise in Japan.”
Toru Bando, CIO of MSREI and Head of MSREI Asia
