Singapore real estate investor SilkRoad Property Partners has completed the purchase of six assets in Tokyo at a total acquisition value of 19.5 billion yen ($145 million) as it looks to establish a presence in Japan.
As part of the third instalment of its pan-Asian value-add fund series Silk Road Asia Value Partners II (SAVP II), the fund manager has added an office building in Central Tokyo and five multifamily properties in major commuter cities in Greater Tokyo, according to a company statement.
SilkRoad’s multifamily strategy is part of its focus on the residential sector that covers senior housing, co-living, and other asset classes in the category. With current assets under management of approximately $2 billion across four funds, the firm is eyeing expansion in Asia’s core markets across Singapore, Japan, Hong Kong, and China.
SilkRoad has been working to kick off its investment in Japan since 2021 and is currently looking to add a team on the ground, it told DealStreetAsia.
Similar to the mandate of its predecessor funds, SilkRoad will be looking at asset enhancement initiatives to bring value to its portfolio assets. Its 9-storey Grade-B office tower, which has a retail space on the ground floor, is accessible by five different subway stations that connect to four transit lines in Japan’s capital city.
The portfolio’s multifamily assets include three existing buildings and two forward commitments with a total of 314 units. These newly-added properties are located in major commuter cities surrounding Central Tokyo within a short walking distance to the nearest subway stations.
SAVP II was oversubscribed with the final closing at $549 million in January of 2021, drawing capital commitments from insurance companies, endowments, pension funds, and other investors from Europe, North America, and Asia.
In February 2022, the investment manager hit $144 million for its debut Asia-focused core-plus vehicle which targets industrial, multifamily, retail, IT, and life science real estate for “long-term return target of 8-10% per annum, on 50% leverage”.
“As a company, it has long been our aspiration to have an active presence in the second-largest real estate market in the world. These acquisitions are just a first, promising step. We are looking to do a lot more in Japan,” said Peter Wittendorp, CEO of SilkRoad.
SilkRoad has become the latest investor to bet on the multifamily sector in the world’s third-largest economy along with PGIM Real Estate, Allianz Real Estate, and Nuveen Real Estate, among many others.
Last Thursday, AXA Investment Managers Alts, an alternative investment arm of the eponymous insurance giant, announced its second batch of acquisition in Japan’s nursing home sector.