AXA IM Alts has made its first investment in Japanese care home market with the acquisition of a portfolio of 15 nursing homes, located across Tokyo, Osaka and Aichi, for €156 million (¥21.9 billion).
The portfolio totals over 800 beds across 15 assets, 14 of which have been constructed after 2013. It is let to five established operators, with a weighted unexpired average lease term of 19.0 years.
Osaka, Aichi and Tokyo are three of Japan’s four largest cities, with significant aging and affluent populations, with the portfolio benefitting from its proximity to local infrastructure and the respective CBDs.
According to the company, the Japanese care home sector is characterised by a shortage of good quality stock, with the demand supply imbalance expected to widen as Japan’s elderly population increases; the number of over 65s is forecast to grow by 20% over the next 20 years . ”The sector also enjoys strong support from the government, which has committed to increase elderly resident capacity from 2.5% to 4% by 2030.”
This transaction marks AXA IM Alts’ fourth acquisition in Japan this year, taking the business’ assets under management in the country to c.¥511 billion (c. €3.5 billion).
Laurent Jacquemin, Head of Asia-Pacific, Real Assets at AXA IM Alts, commented: “This is a rare opportunity to acquire a modern and diversified portfolio of care home assets with an attractive trading history, in a fast growing but still highly fragmented use class. Establishing long-term relationships with leading operators will allow us to quickly scale our platform, in a sector we view as highly defensive and benefitting from the tailwinds of compelling long-term demand supply dynamics.”