City Developments Limited (CDL) has bought the interest in 25 residential freehold assets of superior quality located in Japan in exchange for JPY35billion ($321.9 millions). The assets were acquired from affiliates of BGO which is a major global real estate investment company and will be component of CDL’s private rented sector portfolio.
The properties consist of 836 units. This includes the four units that are retail. They are of less than 2 years old. They are situated in the 23 wards of Tokyo. All 25 assets are situated just 10 minutes away from the train station. 3 of them are in residential areas that are ultra-premium in Tokyo’s central five districts.
The acquisition that is the largest CDL private rental sector transaction in Japan It is believed to be a strong investment opportunity because of the revival in economic activity and the rising demands for rental properties in Tokyo. “Amidst the current uncertainty in the world, Japan has become an appealing destination for international institutional investors, safeguarding the potential of the portfolio to benefit from steady rental growth and a long-lasting capital appreciation” states CDL in a statement on Sept. 28. announcement.
The favorable interest rate environment in Japan provides a strategic and timely chance for the company to increase the portfolio of our residential rental properties through a unique off-market purchase for assets that are performing well,” says Sherman Kwek the CDL group CEO.
“Despite economic uncertainty in the last few years however, the Japan housing portfolio been robust, with steady rent growth and a high occupancy levels of over 95%. This investment marks our firm’s entry into Tokyo’s rental housing market, which will allow us to continue growing in this asset type while making the most of the sector’s huge potential for growth,” he adds. “This move is in line with our goal of extending within the global living sector to increase our recurring income.”
After the conclusion of the deal the CDL’s Japan private sector portfolio that spans Tokyo, Osaka and Yokohama has doubled to 38 assets and an overall total of more than 2100 units. The portfolio is worth an asset worth of over JPY70 billion.