Germany’s AM Alpha Sells Newly Built Tokyo Apartments as Rents Rise

AM Alpha has sold a newly completed rental apartment building in eastern Tokyo, marking the German family office’s second multi-family divestment in the last five months as the firm seeks new investment opportunities.

The 15-storey Alpha Prime Kameido in the Japanese capital’s Koto ward finished construction in June of this year and comprises 126 rental units, AM Alpha said Monday in a release. The property is six minutes by foot from Kameido railway station, providing access to Tokyo’s main business districts, according to the firm.

While the asset was expected to generate robust yield returns, AM Alpha said it saw an opportunity for an early sale at an attractive price, reflecting the firm’s approach to recycling capital into new investments that align with its growth strategy.

“The sale allowed us to realise value appreciation from an established asset and redeploy resources into new promising projects,” said Masatomo Okamoto, AM Alpha’s head of Japan.

Unlocking Value

Financial terms of the deal weren’t disclosed, and AM Alpha didn’t reveal the domestic buyer’s identity. The firm previously sold a 10-storey multi-family asset in Koto ward, known as Alpha Prime Toyocho, to a private fund managed by Mitsui & Co in a deal announced in July.

Alpha Prime Kameido spans 3,700 square metres (39,826 square feet) of rentable space and boasts the highest rating of five stars under Japan’s BELS energy-efficiency certification. An apartment listing website shows monthly rents at the property ranging from JPY 103,000 ($687) for a 26 square metre unit to JPY 213,000 for a 49 square metre unit.

German-language websites identify AM Alpha as the family office of Wolfgang Egger, founder of investment manager Patrizia. The firm said the latest transaction highlighted its ability to create and unlock value for its investment partners.

“After acquiring the asset during its construction phase in June 2022, we significantly enhanced its value through a successful leasing campaign,” Okamoto said. “For us, Alpha Prime Kameido is a perfect example of our ‘develop-to-core’ investment strategy.”

AM Alpha’s previous Asia Pacific property investments include Robinson 112, a 1980-vintage office block on Singapore’s Robinson Road, which the firm acquired in late 2021 for S$269.7 million (then $198.2 million).

The family office ramped up its regional presence this year, announcing in May that it added former DLA Piper partner Les Koltai as head of Australia and Caroline Dellasega, based in Singapore, as vice president of investor relations.

Climbing in Koto

Alpha Prime Kameido’s new owner faces an environment in which average monthly rents in Tokyo’s 23 wards — known as 23W — rose 1.2 percent in the third quarter from the previous three-month period and 5.9 percent year-on-year to reach JPY 4,278 per square metre, according to a Savills leasing report.

Koto ward, bounded by the Sumida River to the west, the Arakawa River to the east and Tokyo Bay to the south, recorded the Inner East submarket’s biggest quarterly rental gain of 2 percent, the consultancy said.

“The 23W residential market has extended its growth after a brief pause in the previous quarter, with most wards recording quarterly rental increments,” Savills said. “Net migration into the 23W remains positive, and has surpassed historical records. Meanwhile, subdued supply and strong wage growth provide greater confidence for continued rental growth.”