Blackstone Seeks Buyer for $1.5B Japan Multifamily Portfolio

Blackstone boss Stephen Schwarzman wants to find a new home for a $1.5 bil Japan apartment portfolio

US private equity giant Blackstone is seeking a buyer for a portfolio of 82 blocks of flats in Japan predicted to fetch up to $1.5 billion.

Blackstone has appointed JLL and Mizuho Trust & Banking as advisers for the sale, with expressions of interest now being sought from prospective buyers.

The set of multifamily residential assets contains 4,500 apartments in ten cities across the country, with the majority located in Tokyo and Osaka, according to information obtained by IPE Real Assets.

Slimming Down a Residential Portfolio

A marketing flyer has been sent to select clients that describes the the apartment blocks as being a “highly desirable opportunity” in one of the world’s leading investment destinations.

The flats are said to have been renovated by Blackstone and are reported to carry a passing rent of JPY 4.9 billion per year with a positive rental reversion rate.

The American firm sold a large chunk of its Japanese residential portfolio, consisting mainly of 10-storey apartment buildings in Osaka and Tokyo, to Anbang for $2.3 billion in November 2016.

That sale came after Blackstone had made two major residential acquisitions in Japan over the previous two years.

In 2015 the company acquired 59 residential properties in Tokyo, Osaka and Nagoya when it bought out Japan Residential Investment for $450 million.

A year before, the firm bought 200 blocks of flats from General Electric’s property arm for more than JPY 190 billion, in a deal made in a period when Japan’s property market was accelerating.

Swapping Flats for Sheds

Blackstone is looking to sell the portfolio of 4,500 apartments at the same time that the US private equity giant has joined other real estate players this year in ramping up its logistics investments in the country.

Nine days ago, the company purchased a portfolio of Japanese warehouses that includes online shopping giant Amazon’s Greater Tokyo distribution centre for around JPY 100 billion ($920 million).

Less than two months earlier, Allianz Real Estate said that it was investing $600 million into China and Japan real estate investment funds managed by logistics real estate developer and fund manager GLP.