TE Capital Partners, the investment arm of Singaporean developer Tong Eng Group, has entered the Japanese multifamily market acquiring two assets in Tokyo for US$50m (€40.2m).

The newly-built buildings in the Minato and Setagaya wards of the city were purchased for the TE Japan Income Partners I fund.

Family offices are investors in the fund, including the family office of Teo Tong Lim, the managing director of Tong Eng Group.

TE Capital Partners’ managing director Emilia Teo said: “This is an excellent opportunity for our investors to gain exposure in a quality multi-family residential portfolio in Tokyo, Japan – a sought-after asset class offering one of the highest stabilised yield spreads in the region.

“We are confident in the stable growth opportunities that the Tokyo residential market offers both during the pandemic and in the long-term, and this certainly aligns with our longer-term aim of acquiring resilient income opportunities regionally.”

Terence Teo, TE Capital Partners’ managing director, said: “Demographic and lifestyle shifts, such as inward city migration and urbanisation will continue to support demand for multifamily residential apartments within proximity and accessibility to key transport connections and nodes.

“This portfolio is in line with our strategy to target assets in Tokyo and within key cities and deliver attractive returns with a defensible level of risk to our investors.”