PGIM Real Estate expands rental housing portfolio in Asia Pacific
Investors - SEPTEMBER 18, 2023

PGIM Real Estate expands rental housing portfolio in Asia Pacific

by Released

PGIM Real Estate has expanded its rental housing portfolio in Asia Pacific through strategic acquisitions and development of a series of properties in Australia, Mainland China and Hong Kong, reinforcing its commitment to the underdeveloped institutional rental housing sector across the region.

Benett Theseira, head of Asia Pacific, PGIM Real Estate, commented, “Shifting demographic trends and worsening homeownership affordability are driving demand for rental housing across major cities. The living sector in Asia Pacific is significantly undersupplied, presenting strong growth potential for investors. The institutional residential market, which offers high-quality, professionally managed housing units, is in a nascent stage in the region outside of Japan.”

While PGIM Real Estate has a significant multifamily portfolio in Japan, its latest rental housing investments in Australia, Mainland China and Hong Kong, acquired on behalf of PGIM Real Estate’s value-add, core and core-plus strategies in Asia Pacific, mark its strategic expansion into alternative markets with strong local demand for this emerging asset class.

In Brisbane and Sydney, PGIM Real Estate has formed a joint venture with an integrated property developer in Australia to develop a portfolio of residential properties for rent in major cities, aiming to deliver much-needed stock into a hugely undersupplied market in Australia.

The joint venture has acquired two seed assets. The first asset is at 458 Wickham Street in Fortitude Valley, Brisbane, while the second is located at 7 Macquarie Street in Parramatta, Sydney. Both sites were selected due to their status as key employment, residential and entertainment hubs that are well located relative to public transport. The properties will be first-of-their-kind residential-for-rent communities, each comprising approximately 300 smaller-scale apartments, offering high levels of amenity and community but also affordability. The joint venture aims to develop further projects of similar size, with a portfolio target of 1,250 to 1,500 apartments at completion.

In Shanghai, PGIM Real Estate has entered into a joint venture with a leading rental apartment operator in China to acquire a 19-story purpose-built apartment building. The property comprises more than 500 apartments and provides common areas and facilities, including a gymnasium and residents’ lounge.

Sitting on top of the Metro Line, the apartment building is within Baoshan Powerlong City, a buzzing commercial hub with a regional shopping mall, office blocks and hotels. Its location and high-quality fittings and furnishings are expected to meet the long-stay living needs of young professionals.

In Hong Kong, PGIM Real Estate acquired two hotels in 2022 and completed the assets’ conversion into modern co-living apartments this year.

Weave Studios – Kowloon West has been converted to 435 fully furnished studio apartments over 29 floors. Located near the Olympic MTR Station, the property launched operations in May and offers 15,000 square feet of open area with shared amenities, including a theater, open kitchen and dining space, collaborative workspaces, lounge, gymnasium, yoga room and outdoor terrace.

Dash Living on Hollywood is a 22-story former hotel building on 263 Hollywood Road, Central, just a stone’s throw away from the CBD and Soho entertainment district. Through an extensive refurbishment program, the property is being transformed into a modern co‑living facility with 148 rooms as well as common areas and community facilities for the tenants.

“Institutional investors like us can play a pivotal role in fostering the growth of this sector by providing an attractive and affordable housing solution for young professionals and other renters in the region. Despite the challenging market conditions, we believe the rental housing sector will benefit from favorable demographics and strong rental demand growth. We expect the sector to provide the sustainable income and return that investors are seeking in a volatile, inflationary environment,” Theseira added.

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