London-based M&G Real Estate has acquired a residential complex and office building in Tokyo on behalf of its core Asia real estate fund, M&G Asia Property Fund.
M&G refused to disclose the deal value but PERE understands that the combined value acquisitions is $150 million dollars.
Residential One is a portfolio of 12 residential apartment blocks spread across major cities in west Japan. KR Toyosu is a seven storied office property located in Central Tokyo. Spread over 135,011 square feet, the building is 100 percent occupied.
“Residential One offers relatively high yields versus Tokyo,” said Katsuhiro Ishikawa, managing director, M&G Real Estate Japan. “With continued capital momentum given increased investment appetite from both domestic and foreign capital, we expect there will be limited supply of similar assets in the near term.”
The real estate fund management arm of UK-based insurance company Prudential has been actively ramping up its investments in Japan of late. In June, it bought F Parc Tenjin, an office building in Fukuouka city in western Japan and Sakurabashi IM Building, an office tower in Osaka. Indeed, the country accounts for 17 percent of its total real estate holdings in Asia-Pacific.
“The acquisitions fit into our strategy of constructing a portfolio in Japan that comprises two-thirds income-oriented assets and one-third growth investments to deliver attractive income and capital growth to investors,” Erle Spratt, the fund’s manager said in a statement.
M&G Asia Property Fund is an open-ended core fund currently containing $1.76 billion worth of real estate investments in Hong Kong, Japan, Singapore, South Korea and Australia. As of June 2014, the fund had investments in ten assets across these countries, with 30 percent of the total holdings in Australia followed by 27 percent in Singapore. In terms of sectors, 50 percent of the fund is currently invested in retail assets followed by 35 percent in the office sector.