M&G buys Japanese residential portfolio for US$57m

London-based M&G Real Estate has purchased three residential buildings in the Japanese cities of Kobe and Nagoya on behalf of its core strategy for JPY 6.07bn (US$57m).

The deal is M&G’s fourth residential portfolio acquisition in Japan, having been an active player in the sector for the past five years.

“Rental demands in the residential sector are high in key cities such as Kobe and Nagoya as the population increases and barriers to entry for purchase remain high,” said Richard van den Berg, who manages the core Asia property strategy for M&G Real Estate.

Overseas investors have made significant investments in Japan’s housing market, including Allianz Real Estate’s recent US$1.2bn acquisition of a core multi-family residential portfolio and German pension fund BVK’s purchase of an Osaka multi-family portfolio in August.

The M&G Real Estate deal includes 307 multi-family residential units across two properties in Kobe and an asset in Nagoya.

The portfolio, which is almost fully occupied, is situated in established residential neighbourhoods with access to public transportation, employment and amenities.

“Japan’s residential market, particularly in key metropolitan cities, remains robust and resilient and we will continue to focus on acquiring assets that provide stable and core income to our investors,” Van den Berg added.

The newly acquired assets grows M&G Real Estate’s Japanese housing portfolio to 23 buildings with more than 1,700 units and over 67,000 sq.m.

M&G Real Estate has £33.5bn of assets under management and is the real estate fund management arm of M&G Investments.

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