Savills Investment Management (Savills IM) has completed investments in the office and residential sectors in Japan, as well as its acquisition of a local neighbourhood shopping centre in Australia for its flagship pan-Asian fund.
In Japan, Savills IM has acquired a high-quality office in Greater Tokyo. The multi-tenant building totals approximately 5,500 sqm of rentable floorspace and is located withing walking distance of Yokohama Station, a major interchange railway station with over 2 million daily passengers and serving 11 train/metro lines.
Also in Japan, Savills IM successfully aggregated a 13-asset portfolio, comprising seven multifamily buildings and six master-leased dormitories. The portfolio forms two investments that were completed with separate vendors. The assets offer a total of 576 rentable units and a combined lettable area of approximately 25,000sqm. They are located across Greater Tokyo and central Fukuoka, in popular residential areas with convenient access to the central business district.
Savills IM’s Japan investment team identified these off-market opportunities through its relationship with the sellers. The purchases represent the first investments in the Japanese office and residential sectors for the pan-Asian fund. The purchase prices are undiscolsed.
In a further transaction, Savills IM acquired 75% of Forest Lakes Shopping Centre in Perth, Australia, together with Greenpool Capital (acquiring 25%), a local Perth retail operator. With a focus on daily customer needs, the centre has an occupancy rate of 97% and a remaining average lease term of 8 years. The purchase price amounts to c. €54 million.
The shopping centre comprises 42 shops of just under 14,580 sqm, and boasts three supermarkets: Aldi, Coles and Woolworths. It is located approximately 15km south-east of the central business district in Perth, the capital of the state of Western Australia, on a 6.6-hectare strategic land holding, with additional sundry land facilitating the potential for various value-add initiatives.
Greg Lapham, Head of Australia, at Savills IM, says: “The real estate market in the Asia-Pacific region offers investors strong economic growth with diversification of investment opportunities. Due to its transparency, Australia is an important and attractive destination for real estate investments and therefore also plays an important role in our flagship pan-Asian fund. Our strong investment platform with 39 employees in the APAC region has secured these off-market transactions for us. The residential related purchases in Japan contribute to the diversification of the fund portfolio by country and sector and offer a high cash-on-cash income from day one.
“We believe that brick-and-mortar shops focused on non-discretionary spend will continue to be of central importance for the grocery trade as well as for daily goods and are therefore pleased to have secured another prime property in this highly competitive segment for the fund.”
Following the acquisition of a neighbourhood shopping centre in Toowoomba, Australia, Forest Lakes is the second retail asset for the fund. In addition, the fund holds an office building in Sydney. In total, the portfolio now comprises 17 properties in Australia and Japan. Further properties are already in an advanced acquisition due diligence phase.
Focused on core-plus investments, the pan-Asian fund was launched in December 2020 and has total equity commitments of approximately €207 million. The fund focuses on developed markets in Asia Pacific and key gateway cities to benefit from their stability, resilience and liquidity.
Savills IM manages properties worth circa €2 billion in the Asia-Pacific region with local offices in Singapore, Tokyo, Bangkok (as part of a cooperation agreement with Savills Thailand), Kuala Lumpur (as part of a cooperation agreement with Savills Malaysia) and Sydney.