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$68 million acquisition of a prime residential portfolio in Japan
Singapore / Hong Kong / Japan / London, 10 October 2024 – M&G has cemented its ambitions in Asia Pacific Living, building on its established UK and European residential capabilities, with the appointment of David Askham to lead its expansion in the sector alongside a $250 million commitment from M&G’s Life business. In addition, M&G has furthered its exposure to the sector through the acquisition of a $68 million1 prime residential portfolio in Osaka, Japan, bringing the firm’s total exposure to the global residential sector to circa $7 billion.
With over 20 years of experience at M&G, David Askham has been appointed Director of Portfolio Management, Asia Living. David will assume responsibility for spearheading the growth and strategic direction of the firm’s investments in the Asia Pacific Living sector. M&G’s Life business has committed to deploy $250 million into the sector as its seeks to expand its portfolio both internationally and into alternative sectors such as residential, bringing its total exposure to Asian real estate to $2.5 billion.
As the real estate cycle enters its recovery phase, investors are increasingly looking to Asia Pacific’s residential markets for resilient, high-growth assets. Opportunities to capitalise on low volatility and value appreciation are growing as these markets mature, especially in Japan, where urbanisation and migration to key cities fuel demand. The latest acquisition of a portfolio of 378 residential units across three 15-storey buildings reflects Japan’s strong demand dynamics and stable economic environment, which offer institutional investors attractive, long-term return potential.
M&G Real Estate Asia has been actively investing in the residential sector across the region for over a decade, with recent acquisitions in Japan’s gateway cities of Tokyo, Osaka and Nagoya, and the investment of over A$450 million in three Build-to-Rent projects currently underway in Sydney and Melbourne.
M&G Real Estate Asia’s broader $9.3 billion portfolio invests in fundamentally well located assets in the mature markets of Australia, Hong Kong, Japan, Singapore and South Korea, which are underpinned by structural and demographic trends. M&G’s objective is to grow its diversified portfolio of high quality, sustainable properties in the key logistics and residential sectors and premium grade offices in gateway cities.
Martin Towns, Deputy Global Head of M&G Real Estate, said: “We see significant growth potential in private markets and real estate is central to our ambitions in this area. With our strong foundations investing across many sectors, we are well positioned to work with our institutional clients to further internationalise their investment portfolios as they seek greater diversification in real estate. Expanding into Asia Pacific Living is a natural progression, leveraging our established $1.2 billion exposure to residential assets in Asia. This expansion builds upon the proven success of our residential investments across the UK and Europe, while harnessing the expertise of our Living team to seek continued growth across regions.
“As we enter the next real estate cycle, sectors once considered to be 'alternative' are now viewed as mainstream by many institutional investors. We expect the Living sector to be the main beneficiary as investors move to take advantage of today’s attractive entry point.”
Jing Dong (JD) Lai, Chief Executive and Chief Investment Officer of M&G Real Estate Asia, said: “David’s successful track record in portfolio management and analysing market dynamics, provides the business with a strong leader who will enable us to capitalise on the untapped potential in Asia Living sector on behalf of our global investor base.
“Our acquisition of prime multi-family assets in Osaka reinforces our long-term belief in Japan’s residential sector. This investment is a direct reflection of our conviction in the Living sector and our vision of building a diversified, high-quality residential portfolio in Asia to complement our existing capabilities.”
Ciaran Mulligan, Chief Investment Officer of M&G’s life business, said: “Within our £126 billion portfolio we are actively seeking to increase our diversification across asset classes, geographically and in sub-sectors where we see the opportunity to generate enhanced returns over the long-term. Through our collaboration with M&G Real Estate, we are investing in more Asian real estate and, specifically, in the residential sector as institutional investors increasingly play a role in providing high quality living accommodation in gateway cities across the UK, Europe and Asia.”
M&G Real Estate is part of M&G’s US$93.6 billion private market business.2