M&G Real Estate Asia has formed a joint venture with ESR to own the US$870m (€725m) ESR Ichikawa Distribution Centre logistics facility in Tokyo.
M&G has acquired a partial interest in the 201,100sqm facility in Chiba from the ESR-managed Redwood Japan Logistics Fund II (RJLF II) fund and has also bought two residential buildings in Osaka on behalf of M&G Asia Property Fund (MAP), its core Asia property strategy.
MAP’s 25% interest in the logistics facility is priced at US$216.6m, while MAP’s 100% interest in the two residential buildings with 280 apartments is priced at US$50m.
ESR Ichikawa DC is jointly owned by four investors, with no single investor holding a majority stake.
Richard van den Berg, fund manager of M&G Asia Property Fund, said: “Japan’s logistics and residential market, particularly in key metropolitan cities, remains robust and resilient with the growth of e-commerce and continued demand for high-quality apartment accommodation.”
Van den Berg said these assets would refresh M&G’s Japan portfolio, extend its market share in Japan, and allow M&G to strengthen its portfolio to provide strong returns over the long term.
Stuart Gibson, co-founder and co-CEO of ESR, said the transaction was doubly significant as an endorsement of ESR’s proprietary product and its continued ability to recycle development projects into long-term open-ended ownership mandates.
“The strong fundamentals of the Japanese market offer compelling opportunities for investors,” said Pierre-Alexandre Humblot, ESR managing director, fund management and capital.
“At ESR, we will continue to leverage our best-in-class asset portfolio and integrated fund management platform for capital recycling, using different strategies to further grow our footprint in Japan,” he said.
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