Japan’s renewed economic vigour is spurring more investment in its property market, especially the multifamily segment, but the environment presents challenges for investors, according to Hong Kong-based Avatar Capital Partners.
The world’s fifth-largest economy was attracting more property investment from both domestic and foreign capital, which required the asset-management firm to be savvy in its investment choices to secure assets, said Angel Li, a founding partner.
Avatar said in July that it had completed fundraising of 15.2 billion yen (US$103 million) for its inaugural real estate fund, ACP Real Estate Fund I, and formed a strategic partnership with US-based real estate investment manager Townsend Group and its client.
The fund acquired five multifamily assets with 700 units in the residential segment in Central Tokyo and was looking to add more, Li said.
“There is still a lot of housing demand in Central Tokyo,” she said. “It’s quite resilient, as the occupancy rate for the multifamily segment is 96 per cent.”
The assets typically comprised one-bedroom units with an area between 25 square metres (269 sq ft) and 40 square metres, Li said. The average asking rent was 150,000 yen a month.
