PGIM Adjusts Strategy Amid Rising Costs in Japan's Real Estate Market
By Editor • September 10, 2026 • 1 min read
PGIM Real Estate, a division within Prudential Financial, is recalibrating its investment strategy in Japan’s real estate sector due to surging interest rates that are inflating acquisition costs. David Fassbender, head of Asia-Pacific real estate at PGIM, emphasized the significant increase in expenses for asset purchases during a recent interview.
Fassbender noted that the rising costs of debt are now a critical factor in the firm’s underwriting processes, leading to a more cautious approach compared to two years ago. The narrowing yield premium between Japanese government bonds and real estate has further complicated investment decisions, particularly in competitive markets, such as office spaces.
“The historically wide yield spread has been eroded or disappeared entirely in some cases,” Fassbender remarked, indicating that the investment landscape is becoming increasingly challenging. He suggested that such dynamics signal a need for adjustment within the market.
Source: www.japantimes.co.jp
