Bain Capital says it plans to bolster its real estate team in Japan, making it the latest global investment firm seeking to capitalize on opportunities in the nation’s property market.
The Boston-based firm needs more staff with expertise to source deals and to help manage or sell off real estate held by Japanese companies that it invests in, said Co-Managing Partner David Gross. There are three people on Bain’s real estate team in Japan, and that could increase to six to 10 in the next year, he said.
"Japan is an interesting market because corporates still own a lot of real estate,” Gross said in an interview in Tokyo. Bain is also interested in opportunities around hospitality, data centers and residential properties in the country, he added.
Global investors including activist funds are increasingly seeing hidden value in Japanese companies that own properties that could be sold. Gross highlighted Bain’s disposal of underutilized real estate held by Showa Aircraft Industry, an aircraft parts manufacturer that it bought four years ago.
"There are a number of deals in our pipeline that are very similar to that,” he said.
After focusing on private equity buyouts for almost two decades in Japan, Bain last year hired former Goldman Sachs Group Managing Director Man Kinoshita as a partner in its special situations group to oversee real estate work in the country and elsewhere in Asia.
Gross, who was promoted to co-head of Bain earlier this year, said he wants to scale up the credit, real estate and insurance arms globally to boost profits. "There’s opportunities to double or triple those businesses,” he said.
Earlier in his career, Gross helped build up Bain’s Asia operations and opened its Tokyo office in 2006.