Aberdeen Standard Investments has entered a joint venture with Sumitomo Mitsui Trust Bank to invest in residential markets in Asia-Pacific.
Aberdeen Standard and Sumitomo Mitsui Trust Real Estate Investment Management will co-invest and co-manage multifamily, senior housing, student housing and corporate housing in mature markets with a primary focus on Japan.
The joint venture will pursue a value-add investment strategy, acquiring newly constructed properties through forward commitments and buying older assets that have the potential to be renovated, repositioned or converted.
Both parties are looking to capitalise on urbanisation in Japan’s largest cities – principally Tokyo and Osaka – while targeting “significant rental yield gaps” that have formed between new and older buildings.
Kang Puay Ju, head of real estate for Asia-Pacific and global head of real estate multi-manager at Aberdeen Standard Investments, said: “Over the next decade cities in the Asian-Pacific region are set to experience very strong growth, fuelled by both domestic and foreign immigration to major metropolises, which bode well for housing demand over the medium-term.”
Environmental, social and governance (ESG) factors will be integrated into the investment process, they said, with the aim of supporting sustainable social development through ESG-screened investments in Japan.
Kengo Noguchi, senior managing executive officer at Sumitomo Mitsui Trust Bank, said: “We are confident in a successful partnership building on our strong capabilities in real estate brokerage and asset management.”
David Paine, global co-head of real estate at Aberdeen Standard Investments, said: “The joint venture is an important step in expanding our global investment offering, as we continue to address investors’ need for alpha and diversified return.”