GE, Aberdeen form $400m Tokyo resi JV

GE Capital Real Estate has formed a two-year joint investment venture to buy studio and one bedroom apartments in the Japanese capital with Europe-based Aberdeen Asset Management.

GE Capital Real Estate has formed a $400 million joint venture with Aberdeen Asset Management to buy Tokyo residential property.

The multifamily vehicle has been launched to invest in studios and one bedroom apartments over the next two years, it was revealed today.

GE said the JV was part of a “broader strategy” to put its “global real estate capabilities to work” for strategic partners and institutional investors. It follows a decision in 2008 by GE to launch its Global Investment Management business to provide third-party investors access to GE's global investing capabilities.

Stockholm-based Aberdeen, which has been investing in Asian property since 2006, has committed to the Tokyo joint venture on behalf of two Asia Pacific property funds of funds and a separate account it advises.

Jon Lekander, global head of indirect investment management for Aberdeen Group, said in a statement: “Until recently we’ve been investing in Asian property primarily through third party funds.” But he added the Tokyo partnership with GE showed how it could “tap unique opportunities” in Asia Pacific such as club deals and joint ventures.

Grace Chang, general manager Asia Pacific, GE Capital Real Estate Global Investment Management, said: “Aberdeen is an ideal partner for our investment program in Tokyo multifamily residential, given its commitment to Asia.”

The JV, which only recently closed, is targeting studio and one bedroom apartment properties in Tokyo alone. The JV partners said the sector had proven resilient throughout the downturn, providing attractive risk-adjusted returns. Despite an overall decline in Japan’s population, the population of Tokyo continues to grow, making residential investments “attractive with stable occupancy demand” they added.

Mark Norbom, president and chief executive officer of GE Japan, said: “This is another clear sign of our continuing confidence in the Japan market.”

GE has been investing in real estate in Japan since 1998, and the recent earthquake is expected to have no impact on this JV, the firm said.