Orix’s real estate investment unit has raised the target size of one of its funds by 33%, reflecting rebounding Japanese institutional investor demand for property market deals.

The subsidiary of Japan’s biggest leasing company will expand the fundraising goal for a real estate fund launched in January to ¥40 billion ($272 million) from ¥30 billion, said Tatsuya Kitamura, the president of the unit, in an interview.

Orix Real Estate Investment Advisors’ fund is a comprehensive type that parks cash in various real estate markets without explicitly targeting specific sectors. Many investors have stayed away in recent years from such products, which peaked in popularity during the late 1980s asset-market bubble era but plunged along with real estate prices when the bubble burst.

Investor demand in Japan for alternative assets including real estate has climbed due to their resilience against inflation and as a way to avoid volatility in stocks and bonds. Over 10 domestic institutional investors, including banks, life insurers, pension funds and corporate entities have committed cash to the Orix fund, according to the company.

“Domestic institutional investors are becoming sensitive to inflation, and there’s a lot of interest in real estate as key assets to hedge against it,” said Kitamura, whose company oversees ¥1 trillion in assets. “They are also becoming more enthusiastic about comprehensive real estate funds, which they were cautious toward before.”

Orix’s fund targets a wide range of domestic real estate, primarily offices, logistics facilities and residential properties. The planned investment period is eight years, and, including debt, the fund plans to acquire real estate totaling ¥120 billion.

The Tokyo-based company isn’t alone in offering real estate-related products. Morgan Stanley raised ¥131 billion for a Japan property fund, exceeding its initial target of ¥75 billion, while Daiwa Securities Group plans to secure ¥100 billion with two partners via a private real estate fund for domestic and overseas institutions.

These fund sales highlight investors’ demand for products that protect against inflation that’s returned in a big way to Japan. Consumer prices excluding fresh food have risen almost 3% on average since April 2022, an extended jump that hasn’t been seen in Japan since the early 1980’s.

That’s pushed office rents and residential lease rates higher, in a positive development for real estate-related funds. Asked rents at large-scale buildings in central Tokyo have risen for 16 straight months through August, according to data from office leasing company Sanko Estate.