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Friday, December 22, 2023

Japan’s Samty Residential Grows Apartment Portfolio With Pair of Deals

Samty Residential acquired the S-RESIDENCE Kamiiida West in Nagoya from its sponsor (Image: heyaceleb)

Japan’s rental residential market continues to be a hub of investment activity in Asia with a Tokyo-listed REIT announcing a pair of apartment investments this week.

Samty Residential Investment Corporation informed the TSE on Wednesday ↗ that it has purchased four apartments from its sponsor for JPY 3.1 billion ($21.6 million).

“The Acquisition will be made with the intent to expand the asset size steadily and improve the stability and quality of the portfolio by utilising the sponsor support of Samty, the main sponsor of Samty Residential,” the trust’s manager said.

The purchase adds apartments in Nagoya, Sapporo, Kagawa and Yokohama to the REIT’s portfolio, with the trust’s manager saying on the same day that it is teaming with its sponsor to purchase a stake in nine multi-family assets ↗, further establishing itself as one of Japan’s largest residential REITs.

Residential Expansion

Samty Residential’s manager said that it expects the four apartment buildings to generate stable rental income, with two of the assets having been completed this year and the oldest in the portfolio having been opened in 2017. The trust also pointed to the value of the assets’ accessibility with all of the properties located within a 10-minute walk of a train station.

Masafumi Takahashi is executive director of Samty Residential

Among the most expensive buildings in the portfolio is S-RESIDENCE Kamiiida West ↗, an 88-unit property located near Nagoya Castle in Japan’s fourth largest city. Rents for a 23 square metre room in the 12-storey building can reach JPY 53,500 per month, according to local luxury apartment website Style-Plus, with the asset having produced monthly rental revenue of JPY 5.6 million in September.

In a separate statement ↗ published this week, the REIT and its sponsor revealed that they have invested in GK Iris 1, a vehicle holding nine assets managed by Samty. The developer has committed JPY 430 million in return for a 16.3 percent stake in the portfolio, while Samty Residential invested JPY 100 million for a 3.8 percent stake.

Carrying an appraised value of JPY 9 billion, the nine properties in the portfolio are located across Greater Tokyo, Nagoya and in Okayama, west of Osaka.

The newest property in the portfolio is Tokyo’s Attirant Itabashi Honcho, which was completed in March. Situated in the capital’s northern reaches near Saitama prefecture, the 33-unit property generated rental revenue of JPY 4 million in September.

Taking a stake alongside Samty and its sponsored REIT, an unnamed domestic investor has purchased a 79.8 percent stake in the vehicle for JPY 2.1 billion.

Samty Residential’s manager added that the move will grant the trust preferential negotiating rights for the assets, providing it with the opportunity to expand its ownership in the future.

Samty Residential said that, following completion of the two transactions, its portfolio value has grown to JPY 163 billion, with its 378,247 square metres of residential properties 96.6 percent occupied as of 30 November.

All Eyes on Japanese Apartments

Samty Residential is growing its portfolio as foreign investors crowd into Asia’s most mature rental residential market, including KKR’s TSE-listed REIT last week nearly doubling its apartment portfolio ↗ in a single deal

The Japan Metropolitan Fund purchased the Dimora Meieki Minami apartment complex in Nagoya for JPY 2.3 billion, adding 47 residential units to the trust’s portfolio. The REIT also acquired a 28.6 percent interest in 12 residences across Greater Tokyo and Osaka for JPY 1.5 billion.

Last November, Alyssa Partners and Invesco Real Estate acquired 15 apartments in Japan ↗ in a deal said to be worth JPY 30 billion.

Hong Kong’s Weave Living entered Japan in September with its purchase of nine multi-family properties in Tokyo ↗ for an undisclosed amount.

Japanese apartments took the largest share of multifamily investment in APAC during the first half of the year with $1.64 billion going into the sector, accounting for 41 percent of all rental residential transactions in the region according to a report from JLL ↗.

Kaylie Pferten
Kaylie Pferten
A pilot of submersible crafts in a former life, now married to my husband David and writing about investment advice.

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