Morgan Stanley Real Estate Investing (MSREI) announced Monday that it has raised $900 million for a new property fund targeting investments in Tokyo, Osaka, and other major Japanese markets, citing favorable macroeconomic trends and structural demand drivers.

The closed-end vehicle, named North Haven Real Estate Japan Strategy Fund I, exceeded its initial fundraising target of $500 million, according to a news release. The fund marks MSREI’s first dedicated Japan strategy.

MSREI said the fund will focus on opportunities across residential, office, and industrial real estate, supported by factors such as high return-to-office rates, growth in office employment, and ongoing urbanization in Japan’s largest cities.

Additional tailwinds include international migration flows and a continued reconfiguration of e-commerce and supply chains, which the firm said are strengthening fundamentals across multiple property types.

The fund completed its first acquisition in March, MSREI disclosed, and about 8% of the fund’s capital is already committed to several residential projects.

“Japan has a positive macroeconomic outlook driven by inflation and wage growth, regulatory changes shifting corporate behavior towards efficiency, and attractive yield spreads with favorable financing terms,” said Yu Kawamata, co-head of MSREI Asia Investments and head of MSREI, in a statement.

“Against this backdrop, real estate fundamentals continue to improve, particularly for sectors supported by long-term structural tailwinds,” Kawamata added.

MSREI is the global real estate investment management platform within Morgan Stanley Investment Management. The platform invests across the risk-return spectrum, with strategies spanning core, value-add, and opportunistic real estate in major markets worldwide.

The Japan-focused strategy reflects growing investor appetite for Asia-based real estate, particularly in markets where low interest rates and stable economic fundamentals offer attractive relative yields compared with other global hubs.

Morgan Stanley did not immediately respond to requests for additional comment. Legal counsel information related to the fundraise was not immediately available Monday.