Kenedix, Nuveen Real Estate and Bouwinvest expand Tokyo multifamily partnership

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Nuveen Real Estate, one of the largest investment managers globally, and Japanese asset manager Kenedix, expanded their Tokyo multifamily partnership with the acquisition of seven additional central Tokyo multifamily properties, totaling US$224m. The strategy’s portfolio now includes 22 properties with a GAV of US$642m.

Located in central Tokyo, specifically Shinjuku-ku, Shinagawa-ku, Taito-ku and Sumida-ku, the seven new properties comprise 428 units and are aimed at middle to upper middle-market tenants seeking an urban lifestyle and strong transport connectivity.

In addition, the strategy has now completed its second close, taking the total to $284m from founding investor Bouwinvest, another institutional investor and Nuveen Real Estate’s parent company – TIAA.

The multifamily sector is the third largest real estate asset class in Japan and has demonstrated stability across 10-year performance. Globally, Nuveen Real Estate manages over $20bn of multifamily assets.

Shu Wantanabe, Director of Capital Transactions, Asia at Nuveen Real Estate, comments: “We first identified the investment opportunities in the Tokyo multifamily sector in 2017 and formed our partnership with Bouwinvest and Kenedix. The sector has provided our investors the opportunity to tap into strong secular fundamentals and growth, adding resilience to their portfolios in a late cycle market.

“Working with an on-the-ground operator is fundamental to building out our portfolio. Kenedix’s local reach has allowed us to source off-market deals and development projects due to their longstanding relationship with developers in the city.”

Soushi Ikeda, Managing Director, Head of Strategic Investment Department at Kenedix, says: “There is strong demand among investors in Japan and other countries for long-term core investments. Our core fund business, which focuses on assembling strategic investment portfolios by meeting this demand, has posted steady growth. TMP is one of the most important components of our core fund business. I am very pleased that this TMP expansion will enable us to provide new investment opportunities.

“Demand for residential properties in Tokyo has been very strong for several years. By maintaining the proper balance between properties for single people and families, TMP is able to produce a consistent return due to a high occupancy rate. Kenedix will continue to use these strengths and the Kenedix model to provide high-quality asset management services.”

Tjarko Edzes, Director Asia-Pacific Investments at Bouwinvest, adds: “Bouwinvest focuses on strong urban locations and we expect demand for residential rental properties in the region will continue to increase as demand from the rising middle class outstrips supply. Therefore, we are pleased to increase our investment exposure to central Tokyo residential assets through this successful partnership.”

TMP is part of Nuveen Real Estate’s enhanced series. This series applies strategies that work together with market cycles, are progressive in light of megatrends, focus on space optimization and identify mispricing opportunities including emerging sectors and locations. They are designed for investors looking for an enhanced level of capital growth from core-plus to opportunistic. In particular, this partnership focuses on generating consistent, stable income from a target demographic in the middle to upper-middle income bracket. Prior instances in the Asia Pacific enhanced series include a China Outlets investment platform and ERES APAC I – Silk Road.