CapitaLand Investment Buying Six Osaka Multi-Family Assets for $106M

Singapore’s CapitaLand Investment has agreed to buy six rental housing assets in Osaka for S$141.4 million ($105.9 million), marking the first multi-family acquisitions for the firm’s flagship regional core-plus fund.

The listed fund management arm of property giant CapitaLand entered into a forward purchase agreement with an Osaka-based developer to pick up the assets for CapitaLand Open End Real Estate Fund, the company said Monday in a release. The projects are to be completed in phases from May 2023 to June 2024, adding to the residential stock in Japan’s — and Asia Pacific’s — second most active multi-family market (after Tokyo).

Including the six properties for COREF and three other multi-family assets to be acquired by CapitaLand Ascott Trust between this year and next, CapitaLand Investment vehicles will hold 30 multi-family properties across eight cities in Japan, said Tan Lai Seng, the firm’s managing director for the country.

“The multi-family sector in key Japanese cities, in particular Osaka and Tokyo, have demonstrated resilience over the past decade, driven by robust demand supported by urban migration to the cities,” Tan said. “The Osaka multi-family sector performed well even during the COVID-19 pandemic, demonstrated by growth in rents and strong occupancy rates of above 95 percent.”

Second City’s Economic Boost

The six newly acquired multi-family assets are near the commercial districts of Umeda and Namba, within walking distance of Osaka Metro stations. The portfolio comprises 428 one-bedroom apartments targeted at corporate tenants and middle-income couples, said CapitaLand Investment, which is majority-owned by CapitaLand parent Temasek Holdings.

The properties are expected to benefit from economic growth in Osaka as it undergoes revitalisation in the run-up to hosting World Expo 2025. The city is also a contender for Japan’s first integrated resort — a euphemism for casino-hotel complex — which is projected to open by 2030.

As a key hub of the Kansai region on Japan’s main island of Honshu, Osaka last year recorded nearly $890 million in multi-family investment deals, which together with Tokyo’s $4.9 billion accounted for more than half of the APAC total of $10.2 billion, according to MSCI data.

“Japan’s urban multi-family sector is one of the bright spots in the Asia Pacific real estate market that has been growing steadily and demonstrated resilience through economic cycles,” said Simon Treacy, chief executive of private equity real estate at CapitaLand Investment.

Tan Stepping Aside

CapitaLand Investment manages S$4.1 billion in assets in Japan, where its income-producing portfolio includes four office buildings in Tokyo and Yokohama and three logistics assets in Greater Tokyo and Osaka.

Through its wholly owned The Ascott Ltd and the SGX-listed CapitaLand Ascott Trust, the firm has over 8,200 units across more than 50 serviced residences, co-living properties, hotels, multi-family and student accommodation properties in nine Japanese cities.

Also on Monday, CapitaLand Investment announced that Tan would be shifting to an advisor role after serving as group country head for Japan since 2017, to be succeeded by market veteran Hideto Yamada.

Yamada, who led global real estate for Japan’s Government Pension Investment Fund, previously spent more than 35 years with Tokyo-based real estate giant Mitsui Fudosan. He starts his new job as CapitaLand Investment’s managing director for Japan on 17 April.