M&G Real Estate makes key Japanese acquisition

17 December 2013   Category: News, Asia, Japan   By Asia Asset Management

As part of its strategy to improve diversification and provide consistent, long-term income in its core Asia real estate portfolio, M&G Real Estate has acquired Merado Daikai, a retail property in an established urban residential neighbourhood of central Kobe, Japan.

The property was purchased under M&G Real Estate’s core Asia real estate investment strategy overseen by fund manager Erle Spratt, which is aimed at institutional investors in Asia, the UK and Europe. Japan now accounts for 3% of the core Asia portfolio.

Merado Daikai is a five-storey retail and office property adjacent to major transport links in Kobe. The property is primarily non-discretionary retail space, i.e. the majority of customer purchases tend to be regular and comprise mainly essentials such as food and pharmacy items.

Mr. Spratt says: “This marks another milestone as we look to add value for our institutional clients. I am very happy with what the acquisition brings to our core Asia property portfolio as we continue to diversify and seek to improve risk-adjusted returns for our clients. We are working to source attractive assets in Japan to add to our portfolio in Asia.”

Katsuhiro Ishikawa, managing director, M&G Real Estate Japan, adds: “Merado Daikai is a high quality building boasting a good period of trading history and it is an excellent strategic location in an area with a dense and growing population. 

“We continue to look for opportunities in the Japanese market, in particular the retail sector for its reliable income, and the office sector for growth. The non-discretionary retail real estate sector in Japan looks attractive due to its stable quality and relatively high cash yields.”

M&G Real Estate's core Asia real estate strategy is available to institutional investors. The strategy holds eight real estate assets in Australia, Hong Kong, Japan, Singapore and South Korea and has assets under management of US$1.22 billion.