Alyssa Partners Teams With Malaysia’s LGB to Buy Tokyo Apartment Building for $65M

Alyssa Partners has acquired a rental apartment building in Tokyo’s central Minato ward in cooperation with a Malaysian conglomerate, as Japan’s hot multi-family segment continues to shrug off higher interest rates.

The Tokyo-based investment manager teamed with Kuala Lumpur-based LGB Group to purchase the 134-unit Grand Concierge Roppongi for a consideration of more than JPY 10 billion ($65 million), according to market sources who spoke to Mingtiandi. The 20-storey building was completed in 2017 and sits opposite the ANA InterContinental Hotel on the Roppongi Dori thoroughfare in the upscale Roppongi neighbourhood.

The latest buy gives Tokyo-based Alyssa, led by managing partner, CEO and co-CIO Chedli Boujellabia, a residential portfolio of JPY 174 billion across 117 properties and more than 5,300 apartment units in Japan, the firm said Friday in a release.

“Given its prime location and the quality of the building, the asset is well positioned to capture both rental growth and further upside from serviced/furnished apartments conversion strategies,” Boujellabia said.

Quick Walk to Metro

The seller’s name wasn’t disclosed, with Alyssa describing the counterparty as an affiliate of a major Japanese conglomerate. Online sources indicate that Grand Concierge Roppongi was owned by Mitsui & Co Digital Asset Management as of May 2023.

The property is situated within a four-minute walk of the Tokyo Metro’s Roppongi-itchome and Tameike-sanno stations and eight minutes from Akasaka station. The building’s 134 apartments each measure 30 square metres (323 square feet) in area, with the acquisition price translating to JPY 74.6 million ($490,000) per unit.

With operations spanning seven countries, LGB’s businesses include waste management, wastewater treatment, power generation and toll roads, as well as property development and investment. Founded in 1978 by engineer Lim Geok Bak, the group entered Japan’s real estate market in 2016 with an initial focus on office and retail.

“We are pleased to expand our long-term investment strategy to include additional asset classes in Japan,” said LGB Group director Sean Lim. “Since 2016, we have successfully diversified our portfolio to encompass office and retail spaces, hotels, and now the residential sector alongside Alyssa Partners. Japan continues to be a key focus investment destination for us.”

Investment volume in Japan’s apartment segment climbed 30 percent year-on-year during the 12 months to the end of November, with the rising cost of debt having “a limited impact on lending conditions to date”, according to Cushman & Wakefield. The surge came despite a 3.4 percent drop in overall investment in income-generating Japanese real estate to JPY 8 trillion during the period, the consultancy said in its Japan MarketBeat Capital Markets report.

Branching Into Sheds

Privately held Alyssa manages JPY 255 billion in real estate assets. The firm pronounces itself “asset class agnostic”, and in December the residential specialist made its first splash in Japan’s logistics market alongside China’s JD Property.

The partners picked up two warehouses with a total gross floor area of 103,000 square metres (1.1 million square feet), with Alyssa acting as asset manager. Located in Chiba and Nagoya, the pair of properties have an appraised value of JPY 35 billion ($220 million) combined, according to market sources who identified the seller as industrial giant GLP.

That same month, Mingtiandi reported that Alyssa had acquired a portfolio of 13 apartment buildings under a partnership with an undisclosed global institutional investor. Market sources familiar with the deal said the portfolio was purchased for close to JPY 30 billion.

Alyssa invests exclusively in Japan and has formed joint ventures with heavyweights including AXA IM, PGIM Real Estate and private equity titan Blackstone.