Mubadala Hooks Up With Manulife, Proprium on $600M Japan Multi-Family JV

Abu Dhabi’s Mubadala Investment Company has jumped into Japan’s red-hot multi-family sector, teaming with Canadian giant Manulife and US private equity shop Proprium Capital Partners on a joint venture to assemble a portfolio worth up to JPY 80 billion ($600 million).

The JV is seeded with existing rental residential properties in Tokyo and Osaka and will seek to acquire more assets with the assistance of locally based Samurai Capital, Mubadala said Wednesday in a release.

The $276 billion sovereign fund and its partners aim to acquire assets delivering affordable and high-quality living spaces for tenants and attractive and sustainable returns for shareholders.

“Japan’s multi-family property sector has proven to be resilient and stable, offering attractive risk-adjusted returns with significant future growth potential,” said Matthias Neuling, head of Asia real estate at Mubadala. “Japan is a key strategic market for Mubadala, and we look forward to working with our partners to create long-term value and deliver sustainable high-quality living spaces for communities across the country.”

Stabilised Properties

No specific details were disclosed about the JV’s seed assets, which are described as high-quality, stabilised properties with convenient access to railway stations and neighbourhood amenities in Japan’s two largest metro areas.

For Proprium, a real estate fund manager spun off from Morgan Stanley in 2013, the new venture marks an extension of its global living strategy to Japan after investments in China, Europe and Australia.

In 2019, Connecticut-based Proprium acquired a Melbourne apartment and hotel complex from Chinese developer Golden Age and US investment firm Starwood Capital for A$600 million ($427 million). The following year the firm set up a $500 million China multi-family joint venture with China SCE Group, Funlive and an unnamed Middle Eastern sovereign fund.

Proprium partner Thomas Wong expects the Japan venture’s properties to outperform the market and generate positive returns for investors.

“Through the collaboration between Proprium and our co-investors, we look forward to scaling up in the Japan multi-family sector,” Wong said.

Manulife previously formed a $170 million joint venture with Tokyo-based fund manager Kenedix to acquire multi-family assets in Japan’s major cities. That vehicle, announced last year, was seeded with a portfolio of nine properties spanning more than 250,000 square feet (23,226 square metres) of net lettable area.

“Our investment in this venture provides us with a further footprint in Japan and the multi-family sector which remains our favourable asset class globally,” said Kenneth Tsang, senior managing director and head of Asia real estate asset management at Manulife Investment Management.

Fund-Fuelled Frenzy

Mubadala’s JV announcement comes one week after Arch Capital Management revealed its acquisition of 25 multi-family assets in Tokyo for an undisclosed amount, marking the Hong Kong-based fund manager’s first investments in Japan.

In April, SilkRoad Property Partners announced its entry into the country with the acquisition of five multi-family assets in Greater Tokyo as part of $150 million in deals that also bagged a central Tokyo office building.

Also in April, Singapore’s CapitaLand Investment agreed to buy six rental housing assets in Osaka for $105.9 million, representing the first multi-family acquisitions for the firm’s flagship regional core-plus fund.

Last month, Hines announced its acquisition of five multi-family properties in Japan on behalf of its flagship pan-Asian fund, signifying the US developer’s second multi-family transaction for the vehicle after the purchase of 11 multi-family assets late last year.