KKR, Weave Buying Six Tokyo Properties to Expand Japan Venture

Rental apartment specialist Weave Living and investment giant KKR have agreed to acquire six Tokyo properties for their Japan multi-family venture, boosting the total portfolio to 17 assets.

The new additions to Weave Living Japan Residential Venture I include three properties in the upscale Minato ward areas of Roppongi, Minami Azabu and Shirokane, the companies said Monday in a release. The Roppongi and Minami Azabu locations will operate under the premium Weave Residences brand, targeting executives in search of high-end living in supply-constrained Minato, while the remaining properties are aimed at a more diverse tenant base under the Weave Place label.

Weave founder and CEO Sachin Doshi described the six properties as “extremely desirable even by Tokyo standards”, with more than 240 fully furnished rental units expected to be ready in the second half of this year.

“Also factoring in the planned Japan debut of our Weave Residences brand, this is a further demonstration of our commitment to offering an ever-wider selection of living options to renters at various life stages, with an emphasis on the distinctive attractiveness of each of the fantastic locations that make up our expanded portfolio in Tokyo,” Doshi said.

Scaling Up Fast

No details about the seller or deal value were disclosed. The announcement of WLJRV I’s enlargement comes just six months after Weave and KKR launched the partnership with a portfolio of 439 units across 11 Tokyo properties that the operator had acquired and stabilised over the preceding 12 months.

“This expansion underscores our conviction in the long-term fundamentals of Japan’s residential sector and ability to deliver high-quality, differentiated offerings to meet the evolving residential needs of corporates and executives in Japan,” said Kensuke Kudo, managing director for real estate at KKR, which is investing in the venture through its Asia real estate strategy. “We look forward to continued collaboration with Sachin to scale this promising platform.”

WLJRV I aims to assemble a portfolio of more than 3,000 units in Japan. The venture invests in both newly built and existing assets, with an initial focus on Tokyo and a potential expansion into Osaka.

In South Korea, Weave and Manhattan-based KKR are seeking to build a Seoul-centric portfolio of 1,200 rental homes. The current Korean assets are a 98-unit facility under the Weave Place brand in the capital’s Dongdaemun district and the 157-unit Weave Suites Sunyu Parkside in the financial hub of Yeouido.

In addition to Japan and South Korea, Weave has projects in Singapore and the company’s hometown of Hong Kong, owning and operating a regional portfolio of 3,000 rental units under the Weave Studios, Weave Place, Weave Suites and Weave Residences brands.

In Singapore, Weave joined with asset management titan BlackRock and local builder Lian Beng Group last month to acquire Momentus Serviced Residences Novena for more than S$100 million ($77.4 million). The purchase came just over three months after Weave opened its second and third locations in the Lion City, a 175-unit facility on Mount Sophia near Orchard Road and a 93-building in the East Coast’s Katong area.

Weave had teamed up with BlackRock to buy what was then known as Citadines Mount Sophia from CapitaLand Ascott Trust in February last year for S$148 million.

Fund Manager Flexes

KKR’s flagship Asia Real Estate Partners fund, which reached a $1.7 billion final closing in 2021, had remaining undeployed capital of $368 million at the end of March, following a series of big-ticket acquisitions in the past two years.

Those deals included the $409 million purchase of the Hyatt Regency Tokyo alongside Hong Kong’s Gaw Capital Partners, as well as investing in the Namsan Green Building in Seoul.

On the private equity side, KKR during the first quarter neared completion of two Japan megadeals under its $15 billion Asian Fund IV buyout strategy: the $4 billion privatisation of systems developer Fuji Soft and an exit from its investment in supermarket group Seiyu in a $2.5 billion transaction.

Bloomberg reported in April that KKR had chosen Morgan Stanley to help work on a potential initial public offering of Japanese logistics operator Logisteed in Tokyo.

Note: This article has been updated to clarify that Weave and KKR are the entities backing Weave Living Japan Residential Venture I. Mingtiandi regrets any misunderstanding.