The private banking arm of the Allied Irish Bank is aiming to raise up to €80 million from Irish investors keen to invest in Japanese real estate.

The fund is seeking up to €80 million, which could be used to attract further borrowings to create a fund of up to €400 million.

It will invest in all types of Japanese property, with "the key focus on Tokyo", according to a memorandum. Investments could also be made in other cities, including Osaka, Nagoya, Fukuoka and Sendai.

Brian Nevin, head of client relationships of AIB Private Banking, said: "The Japanese economy is going through a slow but steady recovery after many years of deflation, when property prices dropped by as much as 70 per cent."

He said the improved economic situation is reflected in rental growth and declining office vacancy rates.

The fund will target a 11 per cent rate of return per annum, and will be run with local partner, Alpha Investment Partners, a subsidiary of Keppel Corporation.

No more than 33 per cent of the fund's capital commitments will be invested in any one investment.

The minimum investment is €50,000 per individual and investors will pay 2 per cent commission to AIB.