CDL ventures into Tokyo’s private rented sector with $321 million investment
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CDL’s latest investment brings its total private rented sector portfolio across Tokyo, Osaka and Yokohama to 38 assets with over 2,100 units.
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Michelle Zhu
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SINGAPORE - City Developments Limited (CDL) has purchased 35 billion yen (S$321 million) worth of interest in a portfolio of 25 residential assets in Tokyo from affiliates of US real estate investment manager BGO, or BentallGreenOak.
It marks the developer’s foray into Tokyo’s rental housing sector, and its largest private rented sector (PRS) transaction in Japan to date.
The 25 freehold residential properties comprise a total of 836 units, of which four are for retail use.
The assets have an average age of less than two years and are located across the 23 city wards in Tokyo.
Three of the properties are in ultra-prime residential areas in Tokyo’s central five wards, said CDL on Thursday.
The group said the portfolio of 25 assets has an average committed occupancy rate of around 97 per cent and a stable rental income.
CDL’s latest investment brings its total PRS portfolio across Tokyo, Osaka and Yokohama to 38 assets with over 2,100 units, and an asset value of more than 70 billion yen.
With its enlarged PRS portfolio in Japan, CDL said it is now well-positioned to benefit from higher demand from accommodation. It expects demand to be fuelled by a recovering economy, rising wages and a post-pandemic resurgence in net migration into Tokyo.
“Japan’s favourable interest-rate environment presents a timely and strategic opportunity for the group to expand our residential rental portfolio through a rare off-market transaction for well-performing assets,” said Mr Sherman Kwek, group chief executive of CDL.
He noted that the group’s Japan residential portfolio has “remained resilient” despite economic volatility over the past few years, given its stable rental growth and occupancy of over 95 per cent.
“This investment marks the group’s entry into Tokyo’s rental housing market, enabling us to further scale up in this asset class while leveraging the sector’s strong growth potential. This move is aligned with our strategy of expanding in the global living sector to enhance our recurring income.”
Shares of CDL closed 0.3 per cent lower at $6.55 on Thursday. THE BUSINESS TIMES
