The partners aim to become key players in Japan’s residential sector, which continues to attract global fund managers with its robust demand, low borrowing costs and dependable yields
Investment banking giant Goldman Sachs has teamed with a local partner to acquire $300 million worth of rental residential properties in Japan during 2022 and up to $500 million annually thereafter.
The joint venture between Goldman Sachs Asset Management and Tokyo-based conglomerate Sojitz will seek value-add opportunities by combining the Sojitz New Urban Development unit’s expertise in renovating aged properties with Goldman’s financial resources, Sojitz said Monday in a release.
In the JV, which has been capitalised with an initial $15 million, the alternative investment arm of Manhattan-based Goldman will hold a 75 percent stake and Sojitz the remaining 25 percent. The partners aim to become key players in Japan’s residential sector, which continues to attract global fund managers with its robust demand, low borrowing costs and dependable yields.
The new venture brings the fund management division of Goldman Sachs into a sector that has already become a favourite of some of the world’s largest institutional investors, with M&G Real Estate, Singapore’s Ascott REIT, Hines and AEW all having made major acquisitions in the country’s multifamily sector this year.
Goldman Sachs Asset Management has more than $400 billion in assets under management in alternative asset classes like real estate, infrastructure and private equity. The new joint venture is scheduled to commence operations in mid-2022, subject to the completion of regulatory approvals.
Goldman announced last November that it would invest at least $30 billion in Asian alternative assets over the next five years as part of a revamp of its operations, with co-head of Asia alternative investing Stephanie Hui telling Bloomberg that the bank would double its investment in the continent to about $60 billion.
The asset management division has ploughed $16 billion into more than 1,800 real estate assets in Japan over the last 25 years, and the unit has AUM in excess of $5 billion in the country.
