A newly-launched Japan multifamily fund, backed by Canadian investor Ivanhoé Cambridge and Allianz insurance companies, has made its first investment, acquiring a portfolio of 12 buildings in Tokyo for around US$90m (€81m).
The Allianz Real Estate Asia-Pacific Japan Multi-Family Fund I was established last year and has since raised US$750m.
The 280 apartments being acquired are due to be completed this year.
Danny Phuan, head of acquisitions for Asia-Pacific at Allianz Real Estate, said that, unlike other Allianz Real Estate funds which focus on core real estate, the new vehicle is able to buy core-plus assets and, in this instance, take on leasing risk.
“We have a lot of experience through managing our existing multifamily assets in Japan, and we understand where the demand is coming from,” said Phuan. “This gives us an edge in the market over our competitors.”
Ivanhoé Cambridge and Allianz companies have each committed $250m to the fund, which with debt is expected to reach US$2bn in gross asset value.
Phuan said the fund would take time to accumulate its assets. “Valuations for big portfolios are high, so we are taking the road less travelled to accumulate the assets,” he said.
Laurent Fischler, head of Investments for Asia-Pacific at Ivanhoé Cambridge, said the portfolio “fully meets the fund’s selection criteria and reinforces our ambitious diversification strategy in Japan and Asia-Pacific”.
He said: “In a market where rising housing prices have resulted in a lack of affordability and ownership of well-located assets, this project will provide a new solution, boasting urban-regeneration benefits and occupant-experience improvements.”
