M&G Real Estate has purchased a portfolio of 30 residential assets in Japan’s gateway cities of Tokyo, Osaka and Nagoya for ¥49.2bn (€372m).
The assets will be held in the M&G Asia Property Fund and the deal lifts M&G Real Estate’s multifamily assets under management in Japan to ¥109.3bn.
Explaining the benefits of the deal for investors, Richard van den Berg, manager of M&G Asia Property Fund, said the combined acquisition would bolster the fund’s resilience, particularly from an income stability perspective.
He said the fund’s increased allocation to the residential sector also provided diversification benefits because residential assets were often regarded as counter-cyclical investments relative to the commercial office and retail sectors.
“Japanese multi-family residential has proven itself through various economic shocks, highlighting the ability of the asset class to enhance risk-adjusted returns for core investors,” he said, adding that Japan’s continued urbanisation underpinned the multi-family sector, in spite of the ageing of the country’s overall population.
M&G Real Estate was an early investor (2014) in Japan’s residential market. Since then, the multi-family sector has matured and is a strongly-favoured investment sector for foreign institutions seeking to allocate capital into Asia-Pacific.
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