Publications

Investors - MAY 24, 2018

Bouwinvest, TH Real Estate and Kenedix partner in Tokyo multifamily investment

by Andrea Zander

TH Real Estate has formed a partnership with Dutch real estate investor Bouwinvest as a cornerstone investor, for a new Tokyo Multifamily investment vehicle, which has secured six assets in Central Tokyo for $180 million.

“With Japan’s economy expected to expand above-trend over the next five years, this partnership is an exciting opportunity to capitalize on a stable and diversified income from the exposure to an alternative asset class, which has seen substantial growth and an increased investor appetite across Asia Pacific,” said Shu Watanabe, director of capital transactions, Asia at TH Real Estate. “This partnership leverages both our global relationship with capital partners and, locally in Japan, with one of the leading players in this space. We look forward to developing this partnership as part of our broader commitment to growth in Asia Pacific. Between the global and local platform with a specialist sector expert, we believe that we can provide an unrivaled product for institutional investors seeking to invest in multifamily properties in Tokyo.”

The partnership, established and managed by TH Real Estate, is the third vehicle in its series, and focuses on generating consistent, stable income from a target demographic in the middle to upper-middle income bracket.

Japan-based Kenedix will act as local asset manager in Japan for the seed portfolio. Kenedix will continue to provide deal information aligning to the investment criteria of the partnership and support expansion of the venture.

“This partnership with TH Real Estate marks our entry into the multifamily investment space on behalf of core, overseas institutional investors representing a welcome diversification of our business model,” said Soushi Ikeda, managing director, head of strategic investment department at Kenedix.

The first close of $200 million includes capital sourced from two institutional investors, including Bouwinvest, in addition to TH Real Estate’s parent company TIAA.

A second close is expected later this year, with a target capital raise of an additional $275 million.

The initial six-asset seed portfolio, comprises 516 premier multifamily units, and is located in a number of highly sought after neighborhoods with excellent amenities across Tokyo. The assets are within a 30-minute commute to Tokyo’s central business district, and include 272 studios, 185 one-beds and 59 two-bed units. All six assets are modern, well-located properties, all within an average walking distance to the nearest station of under seven minutes.

Derived from its city’s approach and commitment to identifying emerging sectors and locations, TH Real Estate has identified Tokyo’s multifamily sector as an exciting opportunity for institutional investors seeking stable, income-generating assets. The multifamily sector is the third-largest real estate asset class in Japan and has demonstrated stability across 10-year performance. TH Real Estate believes that it is further backed by strong demographic megatrends and high demand from institutional investors. Meanwhile, it highlights that Tokyo is one of the most populous metropolitan areas in the world representing a “political powerhouse” and “culture capital”.

 

 

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