Goldman Sachs Group is raising a Japan real estate fund, targeting around $500 million for property deals in the country, according to people with knowledge of the matter.

The New York-based firm has been pitching investors in recent months for the fund, capitalizing on a resurgence in the local property market fueled by low borrowing costs and a weak yen.

The fund will deploy a value-add investment strategy, which typically seeks returns in the mid-teens, and will focus on data centers, logistics, residential and hospitality assets, said one of the people, who asked not to be identified because the matter is private.

It¡¯s aiming for its first close by the end of March, the person added. Goldman has invested in Japanese real estate deals in the past, but mostly on its own balance sheet.

A Tokyo-based spokeswoman for Goldman Sachs declined to comment.

Japan-focused funds have been drawing global investors in recent years, in contrast with other markets where persistently high interest rates and geopolitical uncertainty have weighed on sentiment. In September, Morgan Stanley said it raised ?131 billion for a Japan real estate fund.

Property in the North Asian nation has been attractive to foreign funds because borrowing costs still remain low relative to other developed markets, even after the Bank of Japan raised rates to the highest level in 30 years. Investors with dollar funds can also get greater value from assets due to the yen¡¯s depreciation.

KKR and PAG agreed last month to buy some of beermaker Sapporo Holdings¡¯ real estate business in a deal valued at ?477 billion ($3 billion), one of Japan¡¯s largest property transactions in 2025. Blackstone announced a deal in December worth more than ?100 billion to buy a logistics facility in Tokyo.

Japan¡¯s real estate market saw investment volume grow 22% year-on-year in the first three quarters of 2025 to ?4.71 trillion, according to data from Jones Lang LaSalle. Global property investment volume climbed 21% in the same period.