SINGAPORE (Jan 4): The Straits Trading Company is investing in a Savills fund focusing on residential properties in Japan.

Straits Trading's subsidiary Straits Real Estate (SREPL), through its wholly-owned subsidiary SRE Japan 11, has entered into a subscription agreement to commit JPY9 billion ($106.5 million) in Savills IM Japan Residential Fund.

The fund is a limited partnership established in Singapore that seeks to maximise current income and long-term capital appreciation by acquiring residential properties located in the Greater Tokyo area and other key markets in Japan.

SREPL, 89.5% owned by Straits Trading, is a co-investment vehicle that seeks out real estate related investments & opportunities globally.

SRE Japan 11 will a limited partner of the fund which will be managed by Savills IM Japan Residential Fund GP as the general partner.

Straits Trading says the investment is part of the group's strategy of redeploying capital from its existing property portfolio of high quality, but low yielding investment properties into potentially higher return real estate opportunities via SREPL.

Shares in Straits Trading closed flat at $2.31 on Thursday.