CDL invests in 25 freehold residential assets in Japan for $321.9 mil
25 high-quality freehold residential assets in Japan were acquired by reputable developer City Developments Limited (CDL) for JPY35 billion ($321.9 million). the affiliates of BGO, a leading global real estate investment manager, acquired the interest, and will establish a part of CDL’s private tenancy sector portfolio.
Comprising a total of 836 units, including four retail units, The properties have an average age of less than two years old and are situated in Tokyo’s 23 wards. All of the 25 not fluid properties are located within a short stroll from a railway network. Three of the assets are located in affluent premium residential areas within Tokyo’s central five wards.
The investment is said to have strong potential due to the rebound of economic activities and pent-up demand for rental lodging facilities in Tokyo. “Amidst the uncertainty in global economy, Japan has become an attractive destination for global institutional investors, securing the portfolio’s potential to benefit from both steady rental growth and sustainable capital appreciation,” says CDL in a Sept 28 statement in their recent largest private rented sector transaction in Japan.
The interest rate environment in Japan presents a favorable timely and strategic opportunity for the organization to cast a wider network of our residential leasing portfolio through a rare off-market transaction for well-performing assets,” says CDL’s group CEO, Sherman Kwek.
“Despite bleak economic uncertainty over the past several years, our Japan residential portfolio has remained strong, with stable rental growth and strong occupancy of above 95%. This investment marks the group’s entry into Tokyo’s rental housing market, enabling us to further scale up in this asset class while leveraging on the sector’s strong growth potential,” he elaborated in details. “This strategic shift is in line with our strategy of widening our network in the global living sector to enhance our recurring income.”
Following the legal procedure of the transaction, CDL’s Japan private rented sector portfolio located across Tokyo, Osaka and Yokohama has tripled to 38 assets with a total of over 2,100 units. The portfolio has an asset value of over JPY70 billion.
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