On December 22nd, Allianz Real Estate, one of the world’s largest real estate investment managers, announced  that it has established a new investment platform, in partnership with Ivanhoé Cambridge and other investors, to build a diversified portfolio of multi-family residential assets across top tier cities in Japan. 

The platform, Allianz Real Estate Asia-Pacific Japan Multi-Family Fund I (“AREAP JMF I” or “Venture”), is a Singapore-domiciled, closed-end fund. 

Fully invested, the platform will have an investment capacity of approximately USD 2 billion in Gross Asset Value. Equity commitments for the Venture are currently planned to total USD 750 million within a few weeks, but depending on the pace of capital deployment, the Venture may increase equity to USD 1 billion.

For the first close, Ivanhoé Cambridge, the real estate subsidiary of Caisse de Dépôt et placement du Québec, and Allianz group companies, each committed USD 250 million equity. 

Allianz Real Estate will serve as the Investment Manager and General Partner of the platform. 

The strategy for AREAP JMF I is to acquire primarily newly completed, well-located assets in Japan’s four major cities, Tokyo, Osaka, Nagoya, and Fukuoka, and lease-up and stabilize the assets for long-term hold. 

Speaking in May, 2021, Rushabh Desai joins an esteemed panel to discuss Japan multifamily in detail.  Video courtesy of Mingtiandi.

The Venture will have a strong ESG focus, targeting use of renewable energy, implementation of green leases, green certification of assets, raising portfolio energy efficiency standards and community initiatives. 

“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 stabilized yield spreads to investors,” said Rushabh Desai, Asia Pacific CEO of Allianz Real Estate. “We are very excited to establish this partnership with Ivanhoé Cambridge. The combined expertise will place the Venture in good stead to build a diversified portfolio of high-quality Japanese residential assets with strong ESG credentials.”

“This Venture is an excellent opportunity for us to launch our new investment strategy of Japan multi-family, an attractive sector underscored by robust urbanization trends and limited net supply. This investment will serve to further grow and diversify our portfolio in Japan and Asia-Pacific,” said George Agethen, Senior Vice-President at Ivanhoé Cambridge. “Allianz Real Estate is a like-minded partner, and we are happy to extend our collaboration with them to Asia-Pacific.”

Allianz Real Estate’s exposure in the Asia-Pacific region amounted to USD 8.8 billion as at the end of September 2021. Its Asia-Pacific business is headquartered in Singapore with local offices in Tokyo and Shanghai. Over the last few years, Allianz Real Estate has steadily increased its portfolio of Japanese multi-family investments, which presently comprises 6,000 units across 134 assets and USD 1.7 billion in Gross Asset Value, as well as established an experienced on-the-ground team in Tokyo.

Ivanhoé Cambridge has a growing presence in Asia-Pacific with offices in Singapore, Shanghai, Mumbai and Hong Kong, with a real estate exposure of approximately CA$6 billion in its key markets of China, India, Australia, Singapore and Japan. 2021 was another record year for Ivanhoé Cambridge’s continued diversification towards Asia Pacific, with up to CA$3.4 billion allocated to new strategies focused on the region’s urbanisation and technology-driven macro trends. This new multi-family partnership is Ivanhoé Cambridge’s second Japan investment in 2021, following the last-mile logistics strategy announced earlier in the year.

Further Reading

Allianz Real Estate Press Release (December, 2021)

Japan highlights in Savills IM Real Estate Outlook 2022 report (REthink Tokyo; December, 2021)

Heitman Enters Japan With Tokyo Multifamily Portfolio Acquisition (REthink Tokyo; November, 2021)

CBRE Report Highlights Robust Japan Multifamily Condo Market (REthink Tokyo; September, 2021)

Savills IM increases Japan Residential Portfolio by $218 million (REthink Tokyo; July, 2021)