KKR, Gaw, Alyssa See Macro Tailwinds Boosting Japan Multi-Family: MTD TV

Even as construction costs and interest rates climb, Japan’s multi-family sector continues to attract investment on the back of rising rents and solid market fundamentals, according to senior executives from KKR, Gaw Capital Partners and Alyssa Partners who spoke at Mingtiandi’s 2025 APAC Residential Forum on Wednesday. Watch the full recording>>

Japan’s highly liquid real estate market still appeals to investors seeking assets in Asia Pacific’s biggest rental residential sector, the speakers told MTD TV viewers during the forum, which is sponsored by Yardi. Enthusiasm remains undimmed despite yield compression that has lowered cap rates in Tokyo residential by 30 basis points in the last two years, per DWS research.

For fund management giant KKR, whose Japan business spans private equity, infrastructure and credit as well as real estate, the Land of the Rising Sun ticks all the boxes and stands as a favoured destination not just regionally, but globally.

“It’s a huge market,” said David Cheong, the firm’s co-head of acquisitions for Asia real estate. “Just speaking in general terms, with a tonne of liquidity and relatively stable political environment, despite a gradual rising interest rate environment, the financing cost continues to remain relatively low.”

Resi Rents on a Roll

In the multi-family hotspot of Tokyo, residential rent growth in 2024 averaged 5.3 percent year-on-year for 30 square metre (323 square foot) units and 15.8 percent for units over 70 square metres, according to local property agency AtHome. The figures improved on the average increases of 4.1 percent and 12.5 percent seen in the capital during 2023.

That level of income growth is enticing to investors who entrust their money to Tokyo-based Alyssa Partners, which buys portfolios of apartment buildings and has completed deals in collaboration with global giants like Blackstone. Earlier this year the firm acquired a 669-unit portfolio on behalf of Japan’s own Dai-Ichi Life.

Alyssa managing partner and CEO Chedli Boujellabia met recently with European investors in France who were keen to do more in Japan.

“Last year we doubled our AUM, and for this year we hope to add another billion dollars, $1.5 billion, of which the majority would be residential assets,” Boujellabia told MTD TV. “In terms of the fundamentals, despite the increase in interest rates, the fundamentals continue to be very, very attractive on a relative basis.”

Gaw Capital Partners’ head of Japan, Isabella Lo, acknowledged the concern that interest rates have been moving in the opposite direction to cap rates, but she also noted how the trend of rising construction costs could lend support to exit prices.

“Construction costs have gone up substantially in the past 24 months,” Lo said. “And if we look at existing assets, a lot of them we could still buy at a cheaper price than if you buy land to do a new build.”

Australia’s Evolution Up Next

Mingtiandi’s APAC Residential Forum resumes Tuesday 25 March with a session on how investors are achieving returns from a broadening spectrum of Australian rental residential strategies as student housing moves mainstream.

Joining the MTD TV panel will be Ben Taylor, fund manager for student housing platform Scape, Matt Woodland, managing director for investment management in Australia at US apartment giant Greystar, and Robert Papaleo, national director and head of living at Colliers Australia.

The speakers will discuss Australia’s evolving demographics and examine how trends like population growth, urbanisation and rising housing costs are reshaping the rental residential sector Down Under.

After the interview portion, Mingtiandi’s team will moderate a live Q&A session in which viewers can quiz the speakers on their market outlooks and get direct insights from some of the region’s top experts in the rental housing space.