Sumitomo Trust & Banking and French insurer AXA are set to launch a joint property fund that will target office buildings in prime areas of Tokyo. This comes on the back of what the firms say are signs of regained interest among major investors in Japan and abroad in resuming or starting medium to long-term investment in high-end properties in Japan.

So, could the new fund be an indication of a return to health for the real estate sector?

Martin Eastgate, senior consultant for real estate at CDS, says while the Sumitomo-AXA fund is positive news, it may still take a while for most investors to regain their confidence and appetite for the market, especially hard asset investors.

“The firms with fresh capital and a source of financing will be in a strong position but whilst the general consensus is that prices are near or at bottom, the lack of credit means many companies still have to resolve their current portfolios first,” he says. And that is reflected in stagnant hiring levels.

“Hiring is extremely slow within all areas of real estate, although especially within the acquisitions space as very few deals are taking place,” says Donald Eddy, manager, financial services at Robert Walters Japan.

But Eddy says there is still some replacement and upgrade demand within essential roles such as asset managers and SPC accountants, as well as demand for structured finance candidates to help firms with their refinancing needs.

Ultimately, however, hiring still depends on a firm’s ability to transact, and Eastgate says with limited credit available, or legacy portfolios to re-finance, this is proving difficult for many firms who have been investing in Japan over the past few years.

The few firms that are actively looking and hiring, Eastgate says, are the newer market entrants and the opportunistic investors targeting distressed related investments.

“Such companies will require asset managers as they bring portfolios on board but on the front side they are seeking strong acquisition professionals to manage deal due diligence and pricing,” he adds.