PGIM to invest US$2 billion in Asia property, unfazed by tariffs

[TOKYO] PGIM Real Estate, the property arm of Prudential Financial’s asset manager, expects to invest about US$2 billion across the Asia-Pacific region this year even as Donald Trump’s trade policies fuel concern about economic growth.

The firm invested about US$900 million in real estate in the region in the first quarter, with most of that in Japan, said David Fassbender, PGIM Real Estate’s deputy head of Asia-Pacific. It’s on course to meet the total even as the US tariffs potentially impact real estate investment and fundraising broadly.

“All the deployment numbers are obviously subject to how this kind of plays out now,” Fassbender, who is based in Tokyo and also head of Japan for PGIM Real Estate, said. “We are on track for this year, even if transaction activity could potentially slow down.”

Trump’s levies – some of which were abruptly paused for 90 days – have unleashed havoc across global markets, leaving investors reconsidering how, and if, they should be deploying money. Wealthy Asians have opted to unwind equity investments, hedge fund returns have been hit and initial public offerings are being scuttled.

“It does not really matter what asset class, with this uncertainty in the market, investors will be taking a wait-and-see approach,” Fassbender said. “So what does that mean for real estate markets? Less fresh capital available may, to some extent, push out the recovery of some markets, and it will affect transaction volume.”

It is likely to take time for concerns about the economy to be reflected in real estate, given that it is less liquid than public equity markets. Sectors such as housing or logistics may be impacted by trade ructions in the longer term, Fassbender said.

“One outcome of the tariffs being imposed is clearly that trade will be redirected,” he said. “How that plays out in individual markets, there’s negative and positive scenarios.”

In Japan, if longer-term tariff uncertainty hits economic and rental growth, which have been trending positively as the country returns to inflation, it could affect investments in multi-family apartment housing, for example, Fassbender said.

PGIM is likely to do most of its deals this year in Japan and Australia, he said. The investment firm also sold about US$450 million of Japan real estate in the first quarter, though it expects to acquire more than it disposes of this year, he added.

The firm has already done more than US$600 million in Japan transactions in 2025, purchasing an apartment portfolio in Tokyo, land for a data centre in Osaka and a resort facility south of the capital that it intends to redevelop into a hotel. Fassbender said he’s most interested in hospitality and data centre assets, seeing Japan’s tourism boom and artificial intelligence as drivers of demand in spite of growth headwinds.

“Hospitality is obviously one of the first sectors to be impacted by a slowdown in growth or changes in consumer sentiment,” he said. At the same time, he has “fairly high comfort that tourism growth in Japan will continue”. BLOOMBERG