Nuveen Real Estate’s Asia Pacific Cities vehicle acquires Japanese multifamily portfolio for c. US$140 million

Nuveen Real Estate, one of the world’s largest investment managers, has acquired a portfolio of multifamily properties in Japan for c. US$140 million on behalf of its Asia Pacific Cities vehicle.

The ten residential properties are located across Tokyo and Osaka, comprising more than 600 individual units with high occupancy that can provide a resilient and insulated income profile. All the assets are positioned in affluent areas, with strong transport links into either central Tokyo or central Osaka

Louise Kavanagh, Managing Director Asia Pacific for Nuveen Real Estate, comments: “The latest acquisition adds to our growing portfolio of properties in Japan, whilst concurrently providing asset-specific diversification following the purchase of Odawara Logistics in Greater Tokyo in August last year.

“Demographic and lifestyle shifts, such as inward city migration and increasingly smaller household sizes will continue to support demand for multifamily residential apartments within close proximity and accessibility to key transport connections, with these assets particularly appealing to middle-market tenants seeking a more urban lifestyle.”

Harry Tan, Head of APAC Research for Nuveen Real Estate, says: “Japan is a key target country of investment for our Asia Pacific Cities vehicle. At this point of the cycle, it is important to invest into a robust city economy with secularly strong market fundamentals to future proof our investments. Tokyo multifamily fits in smartly into this strategy: the world’s biggest metropolitan economy (by GDP and population now and in 2030), favourable demographics (both population and household growth) and a very vibrant and diversified business sector.”

The asset represents the fourth acquisition for the open-ended vehicle, which already owns an office asset in Sydney and two logistics facilities in Greater Tokyo and Seoul. The platform has been well-received by the institutional investor community, with further equity flows accepted during the final quarter of the year. This latest acquisition brings the portfolio’s total AUM to over US$500 million.

“Having raised over US$600 million since launch in November 2018, we will be looking to deploy in selective markets where income is still a key driver of rental growth and occupier demand fundamentals remain positive,” adds Louise Kavanagh.

The acquisition is hot on the heels of another Japanese multi-family portfolio acquisition earlier this year, on behalf of Nuveen’s Tokyo Multifamily Partnership. The firm now owns 32 multifamily assets across Japan and has c. US$22 billion of multifamily assets under management globally.

The Asia Pacific Cities vehicle forms part of the firm’s global resilient series, which focuses on investing in high-quality assets in ‘future-proof’ cities that are well-positioned in terms of long-term structural trends, including demographic change, urbanisation and technology and in doing so, possibly delivers attractive, risk-adjusted returns to investors.