AXA Investment Managers – Real Assets, the property arm of the French insurer, has acquired a development site in Sapporo, Japan to build a hotel and offices worth JPY 25bn (US$231.9m).
The 6,691 sq.m. site was acquired on behalf of a client from Japanese conglomerate Yamaha Corporation, according to AXA IM – Real Assets.
The hotel-led building, which is scheduled for completion in 2024, will comprise modern office space and hotel accommodation to meet the two main areas of demand in the area.
“This ambitious project will deliver significant new supplies of high-quality office and hotel accommodation to the Sapporo market, which is characterised by a clear shortage of Grade A stock coupled with soaring levels of demand,” said Laurent Jacquemin, head of Asia Pacific at AXA IM – Real Assets.
Sapporo is the capital city of Hokkaido island, one of Japan’s top tourist destinations.
Hokkaido has a population of two million and has received infrastructure investments to expand the airport and bullet train network, as more and more international visitors flock to the island.
Advanced discussions are underway to pre-let both components of the development.
“We are confident in the long-term return profile of this opportunity thanks to the combination of our development expertise and the project’s strong location in a city consistently ranked as a top tourist destination in Japan,” Jacquemin added.
The investment marks the firm’s third investment in Sapporo and follows the recent forward purchase of a hotel development in Hiroshima.
Earlier this year, AXA IM – Real Assets and an unnamed sovereign wealth fund purchased a US$1bn logistics portfolio in Japan from logistics specialist ESR.
It also snapped up an office development in Tokyo and pre-let the entire building to flexible workspace provider IWG in December last year.
This latest deal adds to the company’s €4.4bn of assets under management across the APAC region.
AXA IM – Real Assets has €85bn in assets under management, including €64.3bn in direct property and infrastructure and €16.9bn in real asset finance.