Allianz Real Estate, one of the world’s largest property investment managers, said on Wednesday it would invest $2 billion in Japanese residential assets.
The Pimco-owned group, based in Munich, would partner with Canada’s Ivanhoé Cambridge and other investors “to build a diversified portfolio of multi-family residential assets across top tier-cities in Japan”.
The Allianz Real Estate Asia-Pacific Japan Multi-Family Fund I is a Singapore-domiciled, closed-end fund. The company said it $750 million had already been committed to the venture.
Ivanhoé Cambridge, the real estate subsidiary of Caisse de Dépôt et placement du Québec, and Allianz group companies, each committed $250 million. Allianz Real Estate will serve as the investment manager.
The fund plans to invest primarily in newly completed properties in Tokyo, Osaka, Nagoya and Fukuoka.
Allianz said in a statement. that the venture would have a strong focus on environment, social and governance (ESG) issues, using renewable energy, obtaining green certification of assets, raising portfolio energy efficiency standards and community initiatives.
‘Attractive Yield Spreads’
“The Japan multi-family residential sector has displayed resilience throughout the Covid-19 pandemic and continues to be a high-conviction asset class, offering stable cash flows and attractive stabilised yield spreads to investors,” said Rushabh Desai, Asia Pacific chief executive of Allianz Real Estate.
Allianz Real Estate’s total global assets under management exceeded 75 billion euros ($84.5 billion) at the end of June.
Its Asia-Pacific exposure totalled $8.8 billion as at the end of September. Its Asia-Pacific business is headquartered in Singapore with local offices in Tokyo and Shanghai.
Over the past few years, the company has increased its portfolio of Japanese multi-family investments, which presently comprises 6,000 units with $1.7 billion in gross asset value, as well as established an experienced on-the-ground team in Tokyo.
Ivanhoé Cambridge has a growing Asia-Pacific presence, with a real estate exposure of about C$6 billion ($4.6 billion) in its key markets of China, India, Australia, Singapore and Japan. Of that, about $3.4 billion was allocated this year.
• George Russell
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