Allianz to Buy 12 Tokyo Assets for $90M via Ivanhoe Cambridge-Backed Japan Strategy

Allianz Real Estate has agreed to purchase a portfolio of residential assets in Tokyo for $90 million, marking the first acquisition on behalf of its recently upsized Japan multifamily fund.

The portfolio consists of 12 newly built assets comprising more than 280 units across 7,500 square metres (80,729 square feet) of net rentable area within Tokyo’s 23 wards. The assets will be leased-up and stabilised for long-term hold, in line with the strategy of Allianz Real Estate Asia-Pacific Japan Multifamily Fund I, the property investment division of the European insurer said Wednesday in a release.

After concluding a fresh capital raise first announced in late December, AREAP JMF I now has a total equity commitment of $750 million, including $250 million each from Canadian pension fund manager Ivanhoe Cambridge and Allianz affiliates. The partners expect the vehicle to reach an investment capacity of $2 billion in gross asset value when fully deployed.

“This portfolio marks AREAP JMF I’s maiden acquisition and affirms our conviction in the attractiveness of Japan’s multifamily residential sector, which continues to be supported by secular trends such as rapid urbanisation,” said Daisuke Noguchi, head of Japan for Allianz Real Estate Asia Pacific. “Moving forward, we will continue to target quality assets in the four major cities of Japan.”

Ivanhoe Diversifies

The 2021-vintage AREAP JMF I is a closed-end fund focused on recently completed residential assets in Tokyo, Osaka, Nagoya and Fukuoka.

Out of Allianz Real Estate’s $8.8 billion in assets under management in Asia Pacific, nearly one-fifth is invested in Japan’s multifamily sector, which the company first entered with the $1.2 billion purchase of a portfolio of 82 rental apartment properties from private equity giant Blackstone in 2019.

Laurent Fischler, who leads Asia Pacific investments for Ivanhoe Cambridge, said the portfolio acquisition reinforces the Quebec-based real estate investor’s diversification strategy in APAC, where the firm also has a $400 million Japan last-mile logistics joint venture with PAG and a $500 million India office joint venture with Embassy Group.

“In a market where rising housing prices have resulted in a lack of affordability and ownership of well-located assets, this project will provide a new solution, boasting urban regeneration benefits and occupant experience improvements,” Fischler said.

Still Dealing

With the latest news, Allianz Real Estate appears not to have missed a beat after announcing the upcoming departure of key dealmaker Rushabh Desai earlier this month.

Desai, who has served as CEO of Allianz Real Estate Asia Pacific for more than five years, is expected to leave around mid-2022 after building the fund manager’s team from three staff to 36 people and establishing offices in Tokyo and Shanghai, in addition to the firm’s regional base in Singapore.

Desai’s successor will reckon with a Japanese rental residential market that continues to provide investment opportunities for Allianz and rivals like M&G Real Estate.

UK-based M&G earlier this month said it had acquired a portfolio of 30 residential properties in key Japanese cities from Blackstone for JPY 49.2 billion ($424.3 million).

The purchase of 1,575 apartments across Tokyo, Osaka and Nagoya was made on behalf of the M&G Asia Property Fund, bringing the vehicle’s assets under management in Japan’s multifamily sector to JPY 109.3 billion ($942.6 million).

Also in March, Singapore-listed Ascott Residence Trust announced a deal to buy a rental housing property in Fukuoka and three more multifamily assets and a student accommodation complex in Osaka for a combined JPY 10.4 billion ($90 million).