Tokyu Land’s Comforia Residential REIT Buying Seven Properties for $86M

Tokyo-listed Comforia Residential REIT has agreed to acquire seven assets across Japan, including multifamily, student housing and senior living properties, for a total of JPY 11.4 billion ($86 million).

The buildings in Tokyo, Osaka, Kyoto and Saitama prefecture comprise nearly 16,450 square metres (177,066 square feet) of gross floor area, the trust’s manager said in a release. The vendor of five of the properties is the REIT’s sponsor, Tokyu Land Corporation, while an unnamed operating company in Japan is selling the other two assets.

The trust’s portfolio consists of 148 properties that were acquired for JPY 283.2 billion, with a total appraisal value of JPY 362.4 billion.

The manager said it decided to add the seven assets based on its strategy aimed at stable earnings and steady growth of the portfolio.

Tokyo Apartments and More

The top property by value among the seven assets, Comforia Nippori, is a 56-unit Tokyo apartment building with 2,621 square metres of gross floor area. The nine-storey block is being acquired from Tokyu Land for JPY 2.67 billion, a 4 percent discount to its JPY 2.78 billion appraisal value as of October 2022.

Developed by Tokyu Land, the rental residence is located a seven-minute walk from Nippori railway station in northeast Tokyo’s Arakawa special ward, a key interchange of five mass transit lines.

“As a whole, the property’s accessibility to Tokyo central area and convenient living environmental features could satisfy the demands of DINKs and family tenants,” the trust’s manager said, making a reference to households with dual income and no kids.

In Kyoto, the trust is picking up two Tokyu Land-built student housing assets, Campus Village Kyoto Ichijoji and Campus Village Kyoto Shimogamohigashi, for a respective JPY 1.72 billion and JPY 1.29 billion.

The other acquisitions include Nichii Home Kawaguchi, a Saitama senior living facility (JPY 1.4 billion); the Comforia Kawaguchi Honcho apartments, also in Saitama (JPY 1.08 billion); the Comforia Nishitenma apartments in Osaka (JPY 1.4 billion); and Neighbors Higashi-Jujo, a co-living space in Tokyo (JPY 1.86 billion).

Market Stays Hot

Comforia Residential REIT is financing its latest acquisitions through borrowing, cash on hand and the issuance of new investment units as announced last week.

Japan’s residential market continues to see brisk investment activity, with private equity giant KKR capping 2022 with the acquisition of 39 multifamily properties located in 15 submarkets across Tokyo.

Also last month, US developer Hines revealed that it had bought up an 11-property multifamily portfolio on behalf of the firm’s flagship pan-Asian property fund. The set spans more than 400 units in Tokyo, Nagoya and Fukuoka.

In November, German asset manager Patrizia launched a $1 billion Japan-focused fund to pick up core and value-add rental residential assets across the nation’s top cities. The vehicle was seeded with four apartment buildings totalling JPY 7.5 billion.