AXA IM Invests $418M in Japanese Multi-Family, Student Housing

AXA IM Alts, a prolific investor in Japanese real estate, has revisited the theme in a bold way with the acquisition of two residential portfolios totalling €423 million ($418 million) in value.

The real estate fund management division of AXA Investment Managers picked up 29 multi-family residential properties and four student accommodation assets in two separate transactions, the French firm announced Monday in a release.

The 1,482-unit multi-family portfolio is spread across high-density neighbourhoods within Greater Tokyo and Osaka, while the student housing assets comprise 539 studio apartments near universities in Greater Tokyo.

“These transactions extend our residential footprint in two of Japan’s most densely populated cities, where demand for high-quality residential units significantly exceeds current supply,” said Laurent Jacquemin, AXA IM Alts’ head of Asia Pacific. “Against a volatile macroeconomic backdrop, the highly defensive build-to-rent and student accommodation sectors are two of AXA IM Alts’ strong conviction calls, reflecting their favourable demographic and societal drivers and attractive income and capital growth characteristics.”

Driven by Demographics

Both portfolio acquisitions were made on behalf of clients by AXA IM Alts, which has €188 billion in assets under management worldwide.

The two transactions reflect the firm’s long-term strategy to invest in residential asset classes supported by strong demographic drivers. Tokyo and Osaka account for more than 43 percent of Japan’s total population and are characterised by increasing demand for high-quality rental assets in each city’s most popular submarkets, the fund manager said.

The multi-family portfolio’s assets were built entirely within the last two years and are weighted heavily towards studio apartments. Most of the 29 properties feature auto-locking entrances, delivery boxes and high-quality interiors, and all have excellent transport links to CBD areas, according to AXA IM Alts.

The student accommodation portfolio consists of four newly built properties run by National Students Information Centre, one of Japan’s largest student housing operators. Located in four highly populous neighbourhoods of Greater Tokyo, the properties promise access to between seven and 11 universities within a 30-minute commute.

Familiar Ground

The latest transactions mark AXA IM Alts’ second and third acquisitions in Japan this year, following the purchase of a pair of rental residential properties in Tokyo for $54 million in a deal announced in May.

Last year, AXA IM Alts purchased a newly built mixed-use property in a central Tokyo tech hub for $48 million, as well as a pair of Osaka residential assets for $94 million from the Japanese division of US fund manager PGIM Real Estate.

In other activity in May of this year, Hong Kong-based Gaw Capital Partners revealed its acquisition of a 32-asset multi-family portfolio in Japan on behalf of a separate account belonging to the Qatar Investment Authority. That news came hot on the heels of US private equity giant Blackstone funding the acquisition of 19 multi-family assets across four Japanese cities in partnership with independent asset manager Alyssa Partners.

In June, Singapore-based private equity firm Q Investment Partners announced the launch of its Japan-focused multi-family fund and joint venture with Alyssa after acquiring a seed portfolio of three stabilised assets with a combined value of $40 million.

In July, Nuveen Real Estate reported the $100 million first closing of its Japan Alternatives Living strategy, which focuses on stabilised senior housing assets and will also consider investments in the student accommodation, single family and co-living sectors.