Foreign Property News | Posted by Shwe Zin Win
German insurer Allianz is making its first large-scale property investment in Japan, spending about 130 billion yen ($1.21 billion) to buy roughly 80 rental condominiums in Tokyo and Osaka from U.S.-based Blackstone Group.
The purchase will be made by Allianz Real Estate, which seeks to expand its portfolio beyond Europe and into Asia. The properties are mainly condos in Tokyo's 23 central wards.
Despite Japan's shrinking population, rents in the area are rising as working couples seek homes closer to their offices.
It held assets totaling 63.5 billion euros ($69.7 billion) under management at the end of 2018.
Many investors are turning to real estate as they hunt for returns amid rock-bottom interest rates globally.
Allianz expects rental demand in Japan's big cities to stay strong for some time, as more people move from rural to urban areas.
Blackstone is expected to hand over the buildings around the end of the year.
The U.S. private equity firm had gradually increased its portfolio of rental condos in Japan's cities, which it saw as a growth asset.
But the company is now unwinding part of this portfolio to long-term investors.
Rental condos in Japan's big cities are believed to generate returns of over 4%, due partly to low financing costs, though Allianz has given no specific forecast.
Ref: Property Report
