Hines Acquires Five Japan Multi-Family Assets for Flagship Asia Fund

US developer Hines on Wednesday announced its acquisition of five multi-family properties in Japan on behalf of the firm’s flagship pan-Asian fund.

Spread across 9,300 square metres (100,104 square feet) and 290 units in Tokyo and Kyoto, the assets will be managed under the sustainability-focused Cavana brand and target urban dwellers in key Japanese cities, Hines said in a release.

The acquisition is the second multi-family transaction for the Hines Asia Property Partners core-plus fund, following the purchase of 11 multi-family assets in Japan late last year. Chiang Ling Ng, chief investment officer for Asia at Hines, described the country’s multi-family segment as a resilient non-discretionary sector and a stabiliser for a blended core-plus strategy.

“It is anticipated to be defensive in an inflationary cycle and with positive leveraged yields, these new acquisitions should continue to add to our growing footprint in the region, allowing us to deliver a high-quality portfolio to our investors,” Ng said.

Living Aggregation Strategy

No details were disclosed about the seller or the deal value, but Houston-based Hines said the latest acquisitions are part of HAPP’s living aggregation strategy for Japan, which aims to scale up to $1 billion in asset value in three to five years.

The 11 properties acquired last year span over 14,000 square metres across more than 400 units in Tokyo, Nagoya and Fukuoka. Under the Cavana banner, the projects intend to focus on sustainability initiatives that encourage tenants to conserve water, recycle materials and reduce their carbon footprint.

“The Japan multi-family market remains an attractive investment strategy due to its resiliency of income, stable yield, large number of available investable assets and attractive risk-adjusted returns,” said Jon Tanaka, country head of Japan at Hines.

Family-run Hines was founded in 1957 and now operates in 30 countries, managing nearly $96 billion in assets globally.

First-Timers Rush In

The month of April saw more players crowd into Japan’s multi-family arena, with SilkRoad Property Partners announcing the acquisition of five multi-family assets in Greater Tokyo as part of $150 million in deals that also bagged a central Tokyo office building. The transactions marked the Singapore-based firm’s first investments in Japan.

Also last month, Singapore’s CapitaLand Investment agreed to buy six rental housing assets in Osaka for $105.9 million, representing the first multi-family acquisitions for the firm’s flagship regional core-plus fund.

One of the busiest global investors in Japan real estate, US-based KKR, struck a deal in April to acquire an under-construction apartment building in the capital city’s Taito ward for $33 million on behalf of the buyout giant’s Tokyo-listed REIT.