Allianz Real Estate has expanded its residential portfolio in Japan with the acquisition of €110m worth of multi-family assets.
The acquisition of the 11 newly-built assets in Tokyo 23 ward, on behalf of the Allianz group, brings its exposure to Japan’s residential-for-rent sector to more than €1.2bn.
“Residential-for-rent is turning out to be one of the most resilient (property) sector in Japan post-COVID-19,” Rushabh Desai, Asia-Pacific CEO of Allianz Real Estate, told IPE Real Assets.
He said that the Allianz existing portfolio in Japan had enjoyed “rental growth in line with market” and high occupancy.
When Allianz bought the portfolio of 82 assets across Japan from Blackstone in November last year for €1.1bn, the occupancy level was around 94-95%.
“Despite the volatile macro-economic environment, we have increased occupancy (to 96%) and returns are in line with our business plan,” Desai said.
“The investment has validated our view that residential-for-rent is a resilient asset class.”
He said that Japanese tenants are likely deferring moving decisions as well as decisions to buy condominiums and that this had benefitted the multifamily market.
Japan’s residential-for-rent market is underpinned by the theme of urbanisation, with the Japanese continuing to be drawn to the country’s big four cities, he added.
Desai said the latest portfolio had a stabilised, well-diversified tenant base.
“We look at opportunities on a risk-adjusted basis” he said. “This investment offers attractive long term income returns, and we have ensured that the investment is protected from downside risks, if any.”
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