Assets Under Management AUM

Goldman Sachs, Sojitz in Japan Multi-family residential JV

Goldman Sachs’ fund management division is ready to scour Tokyo for value-added opportunities

Investment banking giant Goldman Sachs has teamed up with a local partner to acquire $300 million worth of residential rental properties in Japan in 2022 and up to $500 million a year thereafter.

The joint venture between Goldman Sachs Asset Management and Tokyo-based conglomerate Sojitz will seek value-added opportunities by combining the Sojitz New Urban Development unit’s expertise in renovating older properties with Goldman’s financial resources, said Sojitz Monday in a statement.

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In the joint venture, which was capitalized with an initial $15 million, the Manhattan-based alternative investment arm of Goldman will hold a 75% stake and Sojitz the remaining 25%. The partners aim to become key players in the Japanese residential sector, which continues to attract global fund managers with its strong demand, low borrowing costs and reliable returns.

The new venture brings Goldman Sachs’ fund management division into an industry that has already become a favorite of some of the world’s biggest 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.

Double investments in Asia

Goldman Sachs Asset Management has more than $400 billion in assets under management in alternative asset classes such as real estate, infrastructure and private equity. The new joint venture is expected to begin operations in mid-2022, subject to obtaining regulatory approvals.

Stephanie Hui, Co-Head of Alternative Investment in Asia at Goldman Sachs Asset Management

Goldman announced last November that it would invest at least $30 billion in Asian alternative assets over the next five years as part of an overhaul of its operations. the continent to around $60 billion.

The asset management division has invested $16 billion in over 1,800 real estate assets in Japan over the past 25 years, and the unit has an AUM of over $5 billion in the country.

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Elsewhere in Asia, Goldman Sachs Asset Management tapped into the booming logistics sector last July by establishing a $488 million China warehouse joint venture with Warburg Pincus-backed New Ease.

The deal came after New Ease established a joint venture with UK fund manager Actis and a $600m tie-up with JP Morgan Asset Management in 2020, as well as a partnership with Canadian pension fund manager QuadReal. earlier in 2021.

Global Players Rush

Goldman Sachs is one of several institutional investors to step up their activities in Asia this year, with the Japanese property market being an area of ​​particular focus.

In February, British investment management firm Schroders set up a real estate investment operation in Japan under former JP Morgan Asset Management executive Keisuke Kusano.

Earlier this month, Canadian giant Manulife announced the formation of a 19.8 billion yen ($170 million) joint venture with Tokyo-based Kenedix to acquire multi-family assets in major cities across Japan. . The joint venture consists of a portfolio of nine properties covering over 250,000 square feet (23,226 square meters) of net leasable area.

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Then, in mid-March, US private equity giant KKR announced that it had agreed to buy a Japanese REIT manager jointly owned by Mitsubishi Corporation and UBS Asset Management for $2 billion in a a balance sheet transaction using no client funds. The manager, MC-UBSR, oversees a pair of Tokyo-listed trusts with a total of $15 billion in assets under management.

The deal strengthens KKR’s presence in Japan and expands its global real estate business to $55 billion in assets under management, the Manhattan-based company said.