CDL invests in 25 freehold residential assets in Japan for $321.9 mil

CDL has entered the Tokyo rental housing market with its largest private rented sector transaction in Japan to date, purchasing the interests in 25 high-quality freehold residential assets in Japan for JPY35 billion ($321.9 million). The interests were purchased from the affiliates of BGO, a leading global real estate investment manager, and form part of CDL’s private rented sector portfolio.

The properties consist of 836 units, four of which are retail units, with an average age of less than two years, all within a 10-minute walk from a train station. Three of the assets are located in ultra-prime residential areas within Tokyo’s central five wards.

For those staying at Marina Gardens Condo, this retail paradise is less than a 10-minute drive away. With the abundance of offers and discounts, Orchard Road is the ideal destination for shopping. Its range of restaurants and eateries also make it the perfect place for a night out after work or a weekend getaway with friends.

The purchase is said to have potential due to the recovery of economic activities and rising demand for rental accommodation in Tokyo. Japan’s favourable interest rate environment presents a strategic opportunity for CDL to expand their residential rental portfolio. Sherman Kwek, CDL’s group CEO, believes that despite volatility, the portfolio has had stable rental growth and strong occupancy of over 95%.

This investment marks CDL’s entry into Tokyo’s rental housing market, allowing them to scale up in this asset class whilst still leveraging on the sector’s strong growth potential. It is in keeping with their strategy of expanding in the global living sector to increase their recurring income.

Following the completion of the transaction, CDL’s Japan private rented sector portfolio located across Tokyo, Osaka and Yokohama has tripled in size. The portfolio is now comprised of 38 assets with a total of over 2,100 units with an asset value of over JPY70 billion.