Nuveen Real Estate has purchased a portfolio of multifamily assets in Japan for $140 million, as the global property investment manager steps up its exposure in the country.
Nuveen said in a statement that the firm had acquired the ten residential properties in Tokyo and Osaka on behalf of its open-ended Asia Pacific Cities fund, while a source close to the transaction confirmed to Mingtiandi that they had been acquired from Hong Kong fund manager PAG.
The acquisition brings the pan-Asia Pacific fund’s assets under management to $500 million, and comes under two months after Nuveen announced it had spent $224 million to acquire seven central Tokyo multifamily properties through its Tokyo Multifamily Partnership strategy.
“The latest acquisition adds to our growing portfolio of properties in Japan, whilst concurrently providing asset-specific diversification following the purchase of Odawara Logistics in Greater Tokyo in August last year,” said Nuveen Real Estate managing director for Asia Pacific Louise Kavanagh.
Adding to a Growing Japanese Portfolio
The company said in a statement announcing the acquisition that the portfolio consists of more than 600 individual units located in what Nuveen describes as affluent areas with strong transport links that will help to provide a resilient and insulated income profile.
Kavanagh noted that the portfolio’s target market is middle-income tenants seeking an urban lifestyle, with the continuing population growth in Japan’s cities, as well as increasingly smaller household sizes, driving the demand for multifamily properties in the country.
“Japan is a key target country of investment for our Asia Pacific Cities vehicle,” said Harry Tan, Nuveen Real Estate’s head of APAC research.
Tan added that it was important at “this point in the cycle” to invest in cities with “secularly strong market fundamentals to future proof our investments”.
Targeting $2B Over Five Years
The portfolio is the fourth acquisition by Nuveen’s Asia Pacific Cities core property fund since it was established in November 2018 with a target of raising $2 billion over a five year period.
The fund has since raised $600 million, according to Kavanagh, with Nuveen looking to deploy the capital in selective markets where “income is still a key driver of rental growth and occupier demand fundamentals remain positive”.
That deployment includes Nuveen’s purchase two and a half months ago of a 50 percent stake in a 199,500 square metre (2.1 million square foot) logistics asset in Greater Tokyo.
Reports indicate that Nuveen went halves with South Korea’s NH Investment & Securities for that deal with the two firms paying Blackstone JPY 40 billion ($370 million) for the Odawara Logistics facility.
The firm’s Tokyo Multifamily Partnership, which targets rental apartments in the Japanese capital, now includes 22 properties with a gross asset value of $642 million.
Doubling Down on Japan
Nuveen, which holds 22 properties with a gross asset value of $642 million under its Tokyo Multifamily Partnership, is one of a number of global institutions targeting Japan’s rental apartment sector.
Just under a month ago, Blackstone notched Japan’s largest property deal ever when it agreed to buy back a portfolio of Japanese rental apartments from troubled mainland insurer Anbang Insurance for JPY 300 billion.
That transaction came just a few months after the New York fund management giant had sold a portfolio of 82 multifamily assets to Allianz Real Estate for €1.1 billion ($1.2 billion).
Last December, Greystar Real Estate Partners said it was preparing to invest around $200 million in its first acquisition in the country.