AXA Investment Managers – Real Assets, formerly known as AXA Real Estate, has purchased three residential assets in Japan. The acquisitions mark the commencement of a new investment strategy for the firm which will see it initially look to build a €150 million portfolio of residential, retail and office assets.
Two of the assets are situated in Sapporo, the largest city in Hokkaido Island, while the third asset is in Sendai, Japan’s 11th largest city.
The two Sapporo assets were constructed in 2008 and comprise 148 mid-market units located in close proximity to the central business district and the local subway station. The Sendai city property is located within the central Aoba ward, where 30 percent of the city’s population is located.
All three assets are in line with AXA IM – Real Assets’ strategy to acquire well-maintained assets in locations throughout Japan.
“As AXA IM – Real Assets makes its first venture into residential property in Japan, this is a new and significant step for our activity within this key territory. These investments offer a stable and long term good quality yield in an increasingly competitive market for core investments,” commented Tetsuya Karasawa, head of Japan at AXA IM – Real Assets.
Yet, the move to invest in regional Japan takes on added significance as much of the European capital that enters the Japanese market centers on Tokyo. Nonetheless, AXA IM believes the Japanese mid-end residential and office markets have strong fundamentals due to both strong demand and a limited supply of existing assets, facilitating the potential for rental growth.
“From a risk-adjusted perspective, AXA IM – Real Assets feels that Japan is still one of the most attractive developed markets in Asia, and we will look to source further transactions capitalizing on opportunities within the region,” added Frank Khoo, global head of Asia, AXA IM – Real Assets.
Details of the Japanese acquisitions come a day after the firm announced it had re-branded from AXA Real Estate to AXA Investment Managers – Real Assets. The name was changed to reflect the fact that AXA has broadened its offerings over the past several years to include commercial real estate debt, infrastructure and alternatives businesses.
“In parallel, the real estate industry has undergone a significant transformation, expanding its frontiers beyond the traditional definition of real estate and, in response to this, ‘Real Asset’ investments are now a key component of the global multi-asset class offering of the AXA Investment Managers group,” noted an AXA spokesperson.
Over the past 18 years, AXA has become the largest real estate manager in Europe, according to a survey from the European Association for Investors in Non-Listed Real Estate Vehicles (INREV), with €60 billion in current assets under management.