M&G enhances Asia fund with three assets in Japan
Interests in Chiba logistics facility and two Osaka residential buildings total US$267 million
4 May 2021 | The Asset

Investment manager M&G has acquired a partial interest in a prime logistics facility in Chiba Prefecture and two residential buildings in Osaka, Japan, on behalf of M&G Asia Property Fund (MAP), its core Asia property strategy.

MAP’s 25% interest in the prime logistics facility is priced at US$216.6 million, while its 100% interest in the two residential buildings is priced at US$50.0 million.

Built in 2019, ESR Ichikawa Distribution Centre is located in Ichikawa City, within the Gaikando industrial precinct of Greater Tokyo Bay Area. The facility is a CASBEE A rated, state-of-the-art facility comprising two four-storey blocks with a total floor space of 201,100 square metres and a large floor plate of 25,100 square metres.

It is currently fully leased and is expected to generate strong and stable rental income. Increased e-commerce adoption has led to strong logistics occupier demand that has outpaced supply in recent quarters, resulting in record low vacancy rates in the Greater Tokyo area.

ESR Ichikawa DC is jointly owned by four investors with no single investor holding majority stake. The original developer continues to be the property operator and owns a partial stake in the property.

The residential portfolio comprises 280 apartment units across two new buildings which were completed in January 2021. The buildings are located close to the Namba precinct which provides good access to amenities and public transportation.

Leasing progress has been positive with the portfolio achieving an occupancy rate in excess of 90% since completion of construction. This highlights the strength of demand in the residential leasing market in Osaka, as well as the suitability of the subject apartments in the market, the company says.

Richard van den Berg, fund manager of M&G Asia Property Fund, says: “Japan’s logistics and residential market, particularly in key metropolitan cities, remains robust and resilient with the growth of e-commerce and continued demand for high-quality apartment accommodation. These assets will refresh M&G’s Japan portfolio, extend our market share in Japan, and allow us to strengthen our portfolio to provide strong returns over the long term for our investors.”

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