Aberdeen Standard Investments announces Japanese real estate joint venture

ASI said SuMi TRUST has a strong presence in Japan with significant real estate investment capability, a robust nationwide brokerage network and unique access to domestic deal opportunities.

Combining this with ASI’s global distribution platform and extensive Asia Pacific real estate fund management and investment expertise, the joint venture aims to deliver a compelling Asia Pacific real estate strategy for investors.

Through co-investment and co-management by ASI and SuMi TRUST’s subsidiary Sumitomo Mitsui Trust Real Estate Investment Management Co., Ltd. (SuMi TREIM), the joint venture will target investments in residential assets such as multi-family, senior housing, student housing and corporate housing in mature markets in the Asia Pacific region, primarily focusing on Japan.

Adopting a value-added investment strategy, it aims to enhance capital and income through acquiring newly constructed properties on a forward commitment basis, as well as older residential properties which have the potential to be renovated, repositioned or converted.

ASI cited a “continued trend towards urbanisation in Japan, especially the largest cities like Tokyo and Osaka” as the structural underpinning to the joint venture’s strategy, “bolstered by significant rental and yield gaps between new and older buildings”.

Similar trends amongst the Asia Pacific region’s largest cities will support its residential real estate investments beyond Japan, the firm added.

Environmental, Social and Governance (ESG) factors will also be fully embedded into the investment process, with the aim of supporting sustainable social development through ESG-screened investments in Japan.

Kengo Noguchi, senior managing executive officer, Sumitomo Mitsui Trust Bank, said: “We are delighted to provide global investors with a Japan-focused real estate strategy jointly with Aberdeen Standard Investments. We are confident in a successful partnership building on our strong capabilities in real estate brokerage and asset management.”

David Paine, global co-head of real estate, Aberdeen Standard Investments, said: “The joint venture is an important step in expanding our global investment offering, as we continue to address investors’ need for alpha and diversified return. We are pleased to partner with Sumitomo Mitsui Trust Bank to bring a new Japan-focused real estate strategy to clients, and look forward to building out this relationship.”

Kang Puay Ju, head of real estate Asia Pacific and global head of real estate multi-manager, Aberdeen Standard Investments, said: “Over the next decade cities in the Asian Pacific region are set to experience very strong growth, fuelled by both domestic and foreign immigration to major metropolises, which bode well for housing demand over the medium-term.”