QIP Wraps Up $50M Japan Multi-Family Fund With Tokyo Buy

Singapore’s Q Investment Partners has acquired a residential property in central Tokyo as the fourth and final asset of the private equity firm’s Japan multi-family housing fund, marking the closure of the $50 million vehicle.

The property consists of 42 rental units and is located within a 10-minute walk of a subway station serving the Kiba neighbourhood of Tokyo’s Koto ward, QIP said Wednesday in a release.

QIP announced the multi-family fund, called GK APG Asset 1, in June of last year after acquiring a seed portfolio of three assets with a combined value of $40 million. Investment manager Alyssa Partners supports the venture as a co-investor and local operating partner.

“We are delighted to announce the full deployment of the fund and the acquisition of our fourth asset in Tokyo,” said QIP CEO Peter Young. “QIP’s MFH fund is a vehicle that has successfully provided access to the residential market in Japan, which continues to grow in popularity and attractiveness.”

Portfolio Perks Up

In addition to the Kiba asset, the fund includes the 89-unit Luxe Shin Osaka and two Nagoya properties: the 62-unit Porta Nigra Osu and the 56-unit Porta Nigra Chikusa.

The Luxe Shin property in Osaka’s Higashiyodogawa ward was built in 2017 and sits one stop away from central Osaka and near four stations: the Midosuji Line, the main subway line in Osaka; the Tokaido Shinkansen connecting Tokyo and Hiroshima; and lines connecting to Osaka prefecture.

In Nagoya, the 2018-vintage Porta Nigra Osu and the 2019-completed Porta Nigra Chikusa are in Naka ward, the city’s largest commercial district, within walking distance of Nagoya University Hospital and mass transit stations.

QIP acquired a large part of the portfolio during the period of pre-pandemic lifting of travel restrictions, and the assets have since demonstrated accretive income and significant capital value uplift, the firm said, noting that the properties together have an occupancy of 95 percent.

Second Vehicle Planned

The QIP team and its principals have managed over $1.2 billion in real estate investments in developed markets. To extend its commitment to Japan, QIP plans to create a local team with a view to executing a second fund towards the end of 2023.

“Key macro- and microeconomic factors mean that the Japanese residential living sector, and in particular the multi-family asset class, continues to be favoured by institutional capital, with a number of notable deals having taken place in Q1 2023,” Young said. “It’s an exciting place to be.”

Alyssa Partners, meanwhile, has carved out a niche in Japan’s real estate market by tracking down local investment opportunities in partnership with global fund managers.

In May of last year, Alyssa announced that it had joined forces with private equity giant Blackstone to acquire a portfolio of 19 multi-family assets across Tokyo, Osaka, Nagoya and Fukuoka. Sources familiar with the transaction said the portfolio traded at a value in excess of JPY 20 billion ($157 million).

Alyssa also has a joint fund with US-based PGIM Real Estate called AP Residence One GK, which acquired a newly built 11-storey apartment building in northeast Tokyo in November 2021 to add to the platform’s JPY 9.2 billion ($81 million) seed portfolio established in January of that year.

“QIP’s successful closure of the multi-family fund in Japan is another strong indication of the strength and continued robustness of the Japan residential living sector,” said Alyssa managing partner and CEO Chedli Boujellabia.