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

CDL’s acquisition of 25 high-quality freehold residential assets in Japan for JPY35 billion ($321.9 million) has cemented its largest private rented sector transaction in the country. The assets, which are located in Tokyo’s 23 wards with an average age of less than two years old, and are within a 10-minute walk from a train station.

Three of the assets sit within prime residential areas in the capital, Tokyo’s central five wards. This move marks the group’s entry into the city’s rental housing market and will enable CDL to further scale up in the asset class while leveraging its strong growth potential.

The investor has capitalised on Japan’s favourable interest rate environment and the portfolio is said to have strong investment potential due to the recovery of economic activities and rising demand for rental accommodation in Tokyo. In total, the transaction will triple CDL’s Japan private rented sector portfolio, located across Tokyo, Osaka and Yokohama, to 38 assets with a total of over 2,100 units and with an asset value of over JPY70 billion.

Senja Residences EC offers buyers the peace of mind that comes with a thoughtfully designed and planned development. It is situated in Woodlands, near the Sembawang MRT station – an ideal location for families or couples with children. The facilities and amenities offered by Senja Residences are great, and buyers can enjoy a variety of recreational activities such as swimming, gym, and BBQ pits. In addition, the building is also equipped with a childcare centre, minimart, and even a clinic.

Sherman Kwek, CDL’s group CEO, says the acquisition “presents a timely and strategic opportunity for the group to expand our residential rental portfolio through a rare off-market transaction for well-performing assets. Despite economic volatility over the past few years, our Japan residential portfolio has remained resilient, with stable rental growth and strong occupancy of above 95%.

This investment is said to be aligned with CDL’s strategy of expanding in the global living sector to enhance recurring income. With this purchase, the interests were purchased from the affiliates of BGO, a leading global real estate investment manager, and will form a part of CDL’s private rented sector portfolio. They comprise a total of 836 units, including four retail units.

The portfolio’s potential to benefit from both steady rental growth and sustainable capital appreciation makes it an attractive destination for global investors. This marks the group’s largest private rented sector transaction in Japan and is one of many investments that have been made this year, such as the top bid for Champions Way GLS site at $904psf ppr.