Singapore’s QIP Acquires $40M Japan Multi-Family Portfolio With Alyssa to Launch JV, Fund

Singapore-based private equity firm Q Investment Partners has announced the launch of its Japan-focused multi-family fund and joint venture with Alyssa Partners after acquiring a seed portfolio of three stabilised assets with a combined value of $40 million.

The seed properties consist of two rental apartment buildings in Nagoya and another in Osaka with a total of 207 units at 90 percent occupancy, QIP said Monday in a release. Purchased from local companies, the assets are expected to generate an internal rate of return of between 8 and 10 percent and an annual yield of 5 percent.

Investment manager Alyssa, which has offices in Tokyo and Hong Kong, will support the venture as a co-investor and local operating partner, taking advantage of the firm’s on-the-ground relationships in Japan. The JV is targeting multi-family properties in the key cities of Tokyo, Osaka, Nagoya and Fukuoka.

“We structured this first vehicle so that we can add two or three additional residential assets in the next six to nine months,” Alyssa managing partner and CEO Chedli Boujellabia told Mingtiandi on Monday.

Lifting the Lid

News of the partners’ multi-family fund had bubbled on social networks in recent weeks before Monday’s statement. The fund, called GK APG Asset 1, was created in March before completing the Osaka acquisition in April and the Nagoya transactions in May, Boujellabia said.

The property in Osaka’s Higashiyodogawa ward, known as Luxe Shin, was built in 2017 and comprises 89 units. The building 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 offers 62 units and the 2019-completed Porta Nigra Chikusa contains 56 units. Both properties are in Naka ward, the city’s largest commercial district, within walking distance of Nagoya University Hospital and mass transit stations.

QIP and its principals have managed more than $1.2 billion worth of real estate investments in developed markets, including multi-family properties in the US and student accommodation in the UK.

“This joint venture with Alyssa Partners further solidifies QIP’s standing as a leading investor and provider of residential living real estate assets as we continue to develop our residential housing business across Japan,” said CEO Peter Young. “It also highlights the attractive risk-adjusted investment returns that are available via Japan’s multi-family sector, an asset class that is highly in demand from institutional investors.”

Potent Partnerships

Founded in 2012, Alyssa has carved out a niche in Japan’s real estate market by tracking down local investment opportunities in partnership with global fund managers.

In late May, the firm 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 sourced and negotiated AXA IM Alts’ acquisition of a Shibuya mixed-use development for €41 million ($48 million) last September and co-developed the Roppongi Tower office project with the French firm before exiting the investment last August.

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 last November to add to the platform’s JPY 9.2 billion ($81 million) seed portfolio established in January 2021.