Germany’s largest pension fund Bayerische Versorgungskammer (BVK) has sold a landmark office tower in Osaka, Japan to local real estate company Phoenix, and simultaneously acquired a residential portfolio in the city.
The sale of the Midosuji Grand Tower and the purchase of 18 residential assets were carried out by CBRE Global Investors and Universal-Investment on behalf of BVK.
BVK, which acquired the 30,000sqm Midosuji Grand Tower in 2015, is seeking to take profits from the office investment while reinvesting capital into income-producing residential assets.
The residential portfolio includes 1,000 units across central Osaka and has a blended occupancy of more than 95%.
“The disposition of the office investment achieves a major milestone by realising strong investment performance for BVK, while simultaneously shifting capital to a more stable investment class at a time when market fundamentals are expected to peak and alternatives remain expensive,” said Jean-Antoine Robert, portfolio manager at CBRE Global Investors.
“Demand for residential apartments continues to remain buoyant in Japan’s major cities. The portfolio is an excellent complement to our client’s existing residential investments in Japan.
“The quality, composition and pricing of this portfolio position it to outperform the broader market during our projected long-term investment period.”
Michael Pierce, Asia-Pacific portfolio manager at CBRE Global Investors, said: “The residential portfolio is the third investment in Japan and the 13th overall executed on behalf of the BVK global mandate.
“The stable income profile of this asset class, coupled with the high demand for this segment of compact residential units, make this investment a great fit for the BVK mandate.”