M&G Real Estate, the real estate fund manager of UK-based M&G Investments, has purchased a portfolio of 12 residential buildings in Japan in one of its largest housing portfolio acquisitions ever.
The portfolio is almost fully occupied, with assets located in prime districts around in Tokyo, Osaka, Kyoto and Fukuoka, the firm announced. Financial details were not disclosed.
The transaction was made on behalf of M&G Real Estate’s core Asian property strategy and follows its acquisition of three residential buildings in Kobe and Nagoya for US$57m in October.
“This is one of the largest portfolios of residential properties that we’ve acquired and an opportunity for M&G to increase our Japanese exposure to 22% and residential exposure to 10%,” said Richard van den Berg, who manages the firm’s core Asian property strategy.
Institutional investors have made some big plays in Japan’s residential property market this year, including Allianz Real Estate’s US$1.2bn acquisition of a core multi-family residential portfolio in October.
German pension fund Bayerische Versorgungskammer (BVK) acquired a portfolio of more than 1,000 residential units in Osaka in August, while Japan’s Sumitomo Mitsui Trust Bank and UK-based asset manager Aberdeen Standard Investments formed a residential property joint venture focused on Japan in June.
“We continue to be positive about the fundamentals in targeted areas in Japan, where urbanisation trends remain strong,” said van den Berg.
“Coupled with high capital barriers for purchase and the high level of construction cost, we anticipate a moderate supply for new homes in the market, which will sustain the high demand for rental homes.”
The deal is believed to be M&G Real Estate’s fifth residential portfolio acquisition in Japan, having been an active player in the market for the past five years.
Prior to this deal, M&G Real Estate’s Japanese housing portfolio featured 23 buildings with more than 1,700 units comprising over 67,000 sq.m in total.
M&G Real Estate has £33.5bn in assets under management.