CapitaLand fund to buy multifamily portfolio in Japan for S$141m

CapitaLand fund to buy multifamily portfolio in Japan for S$141m

Singapore-based CapitaLand Investment has agreed to forward purchase six multifamily assets in Central Osaka, Japan for S$141.4 million (US$105.9 million) from an established Osaka-based residential developer.

The company will acquire the portfolio for its flagship regional core-plus fund, CapitaLand Open End Real Estate Fund (COREF). 

The deal marks COREF’s entry into the multifamily sector. 

The six multifamily assets are located close to the commercial districts of Umeda and Namba, and within walking distance to the nearest respective subway stations.  The portfolio comprises 428 premium one-bedroom apartments with attractively designed interiors and quality specifications targeted at corporate tenants and middle-income couples.  

The properties will be completed in phases from May 2023 to June 2024 and will benefit from the considerable growth potential of Osaka City which is undergoing revitalisation in the run-up to World Expo 2025.  

Osaka is also a major contender for Japan’s first integrated resort, which is projected to open by 2030.  These developments will increase the city’s attractiveness and the size of its working population, leading to increased demand for rental apartments. 

Tan Lai Seng, Managing Director for Japan, CLI, said: “CLI has over 20 years of experience in Japan, and we are pleased to source and execute this off-market deal for COREF in Japan’s sought-after multifamily sector that has seen increasing interest from international investors.   As part of our thematic strategy to invest in the multifamily sector, the Group has to date deployed about S$1.1 billion in Japan across 60 properties through its various investment vehicles, whilst successfully recycling investors’ capital.  Including the six newly acquired multifamily properties by COREF and another three multifamily properties acquired by CLI’s lodging trust CapitaLand Ascott Trust which will be completed between 2Q 2023 and 2024[3], CLI vehicles will hold a total of 30 multifamily properties across eight cities in Japan.  The multifamily sector in key Japanese cities, in particular Osaka and Tokyo, have demonstrated resilience over the past decade, driven by robust demand supported by urban migration to the cities.  The Osaka multifamily sector performed well even during the COVID-19 pandemic, demonstrated by growth in rents and strong occupancy rates of above 95%.”

Simon Treacy, CEO, Private Equity Real Estate, Real Assets, CLI, said: “We continue to build on our private fund management’s achievements with the acquisition of a high-quality portfolio of multifamily assets in Osaka for COREF.  Japan’s urban multifamily sector is one of the bright spots in the Asia Pacific real estate market that has been growing steadily and demonstrated resilience through economic cycles.  Since its inception in September 2021, COREF has invested selectively in Japan, Singapore and Australia to achieve geographical diversification.  Since 2022, CLI has launched 11 new private vehicles and added 17 new investors to our global network of capital partners amidst volatile market conditions, bringing equity raised to date to over S$4 billion.  Building on this momentum, we will continue to leverage our ground expertise and deep experience in the countries we operate in.  We remain focused on seeking attractive opportunities to deliver quality returns to our fund investors as we grow the business.”

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