Real estate investment manager Allianz Real Estate has established a new investment platform, in partnership with Ivanhoé Cambridge and other investors, to build a diversified portfolio of multi-family residential assets across cities in Japan.

The Allianz Real Estate Asia-Pacific Japan Multi-Family Fund I (AREAP JMF I), is a Singapore-domiciled, closed-end fund. Fully invested, the platform will have an investment capacity of approximately US$2 billion ($2.7 billion) in gross asset value. 

Equity commitments for the fund are currently planned to total US$750 million within a few weeks, but depending on the pace of capital deployment, equity may be increased to US$1 billion. 

For the first close, Ivanhoé Cambridge, the real estate subsidiary of Quebec pension fund Caisse de Dépôt et placement du Québec, and Allianz group companies, each committed US$250 million equity. 

Allianz Real Estate will serve as the investment manager and general partner of the platform. 

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The strategy for AREAP JMF I is to acquire primarily newly completed, well-located assets in Japan’s four major cities, Tokyo, Osaka, Nagoya, and Fukuoka, and lease-up and stabilize the assets for longterm hold. 

The fund will have a strong environmental, social and governance (ESG) focus, targeting use of renewable energy, implementation of green leases, green certification of assets, raising portfolio energy efficiency standards and community initiatives.

“The Japan multi-family residential sector has displayed resilience throughout the COVID-19 pandemic and continues to be a high-conviction asset class, offering stable cash flows and attractive stabilized yield spreads to investors,” says Rushabh Desai, Asia Pacific CEO of Allianz Real Estate. 

“We are very excited to establish this partnership with Ivanhoé Cambridge. The combined expertise will place the Venture in good stead to build a diversified portfolio of high-quality Japanese residential assets with strong ESG credentials.” 

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Allianz Real Estate’s exposure in the Asia-Pacific region amounted to US$8.8 billion as at the end of September 2021. Its Asia-Pacific business is headquartered in Singapore with local offices in Tokyo and Shanghai.

Allianz Real Estate’s portfolio of Japanese multi-family investments presently comprises 6,000 units across 134 assets and US$1.7 billion in gross asset value.

Meanwhile, Ivanhoé Cambridge has a real estate exposure of approximately CA$6 billion ($6.3 billion) in its key markets of China, India, Australia, Singapore and Japan. AREAP JMF I is Ivanhoé Cambridge’s second Japan investment in 2021, following a last-mile logistics strategy announced earlier in the year. 

Photo of Rushabh Desai: Allianz Real Estate