Blackstone Buys $157M Japan Multifamily Portfolio with Alyssa Partners

Blackstone has become the latest global investor to join forces with independent asset manager Alyssa Partners on a Japan residential deal, with the pair having acquired a portfolio of 19 multifamily assets across four key cities.

The properties in Tokyo, Osaka, Nagoya and Fukuoka have an average age of less than six years and comprise 1,075 apartment units spanning a gross area of 32,600 square metres (350,903 square feet), Alyssa said Monday in a release. Alyssa declined to provide financial particulars, but sources familiar with the transaction said the portfolio traded at a value in excess of JPY 20 billion ($157 million). Blackstone representatives had not replied to a request for comment by the time of publication.

Funds managed by Blackstone hold a majority equity stake in the partnership, which bought the portfolio from a major Japanese developer. Alyssa has previously worked with fund managers PGIM Real Estate and AXA IM Alts on transactions in the Japanese market.

“We are honoured to have successfully closed our first co-investment with Blackstone, the leading global real estate investment firm, which demonstrates Alyssa Partners’ ability to originate and execute large-scale investments alongside major institutional investors,” said Chedli Boujellabia, managing partner and CEO of Alyssa Partners. “As we grow our AUM across various asset classes, we continue to believe in the strong fundamentals of the multifamily sector in Japan where we expect to deploy more capital.”

Boots on the Ground

No details were given about specific assets in the portfolio, but Alyssa described them as high-quality, stabilised properties within walking distance to subway or railway stations.

The firm, which has offices in Hong Kong and Tokyo, already has a joint fund with US-based PGIM Real Estate called AP Residence One GK. The investment vehicle acquired a newly built 11-storey apartment building in northeast Tokyo last November to add to the platform’s JPY 9.2 billion ($81 million) seed portfolio established in January 2021.

Alyssa had teamed up with PGIM early last year on the JPY 9.2 billion ($88 million) purchase of four newly completed apartment projects in Tokyo containing 282 homes. That deal was disclosed just a few weeks after PGIM announced a $120 million acquisition of a six-building apartment portfolio in Tokyo and Yokohama under its core strategy.

Alyssa has also tracked down Tokyo deals for AXA IM Alts, sourcing and negotiating the French fund manager’s acquisition of a Shibuya mixed-use development for €41 million ($48 million) last September and co-developing the Roppongi Tower office project with the European firm before exiting the investment last August.

Earlier this year, the investment manager launched a joint investment vehicle with Singapore’s Q Investment Partners (QIP) to target stabilised multifamily assets across top cities in Japan, picking up an Osaka residential property as the strategy’s maiden acquisition.

Ready for More Deals

The tie-up with Alyssa reconfirms Blackstone’s oft-stated commitment to Japan’s rental residential market. Most recently, the Manhattan-based group purchased an eight-floor apartment building in Tokyo from the real estate arm of Sony in a deal reported last November.

“We look forward to building our partnership with Alyssa Partners and continuing to invest in multifamily, one of our highest conviction investment themes in Japan, which makes up a significant portion of our portfolio today,” said Daisuke Kitta, head of Japan real estate at Blackstone. “We believe it’s a resilient sector with strong fundamentals that’s well-positioned for long-term growth. This is another step towards building our presence in Japan, where we’ve developed a strong presence in real estate over the last 15 years.”

In March of this year, Blackstone sold a 30-asset portfolio of residential properties in key Japanese cities to UK-based asset manager M&G Real Estate for JPY 49.2 billion ($424.3 million).

On Monday, the private equity giant signalled a further expansion of its presence in the region with the appointment of Mark Glengarry as head of Asia Pacific origination at Blackstone Credit, based in Sydney. The group chaired by billionaire co-founder Stephen Schwarzman announced last month that it had secured $1.1 billion in capital commitments for its third Asian opportunistic real estate strategy in the first quarter, targeting $9 billion in equity for the closed-end fund.