PGIM Real Estate says it is taking a more selective approach to Japanese
property acquisitions as higher interest rates raise transaction costs. David
Fasbender, head of APAC real estate, said PGIM is now explicitly factoring in
higher debt costs and is more selective than two years ago. Narrowed yield
premia between JGBs and property—especially in competitive sectors like
offices—have raised investment hurdles; in some cases historic spreads have been
fully eroded, he said, indicating a need for pricing or portfolio adjustments.
