Axa IM Alts makes €156m first foray into Japanese care homes

Axa IM Alts has made its first investment in the Japanese care home market with a €156 million portfolio acquisition.

The company has acquired a portfolio of 15 nursing homes located in Tokyo, Osaka and Aichi, three of Japan’s four largest cities, with significant aging and affluent populations. Axa IM Alts paid €156 million (¥21.9 billion), including acquisition costs for the portfolio, which has a total of more than 800 beds. Fourteen of the homes were constructed after 2013.

The portfolio is let to five established operators and leases have a weighted unexpired average term of 19 years.

Axa IM Alts explained in a statement that the Japanese care home sector is characterised by a shortage of good quality stock, with the demand/supply imbalance expected to widen as Japan’s elderly population increases. Numbers of over 65s are forecast to grow by 20% over the next 20 years but the sector has strong support from the government, which has committed to increase elderly resident capacity from 2.5% to 4% by 2030.

This deal is Axa IM Alts’ fourth acquisition in Japan this year and increases its assets under management there to about ¥511 billion (€3.5 billion). It was also part of Axa IM Alts’ long-term strategy to invest into residential asset classes.

“This is a rare opportunity to acquire a modern and diversified portfolio of care home assets with an attractive trading history, in a fast growing but still highly fragmented use class,” said Laurent Jacquemin, head of Asia-Pacific, real assets at Axa IM Alts. “Establishing long-term relationships with leading operators will allow us to quickly scale our platform, in a sector we view as highly defensive and benefitting from the tailwinds of compelling long-term demand supply dynamics.”

Author: Paul Strohm

Source: Real Asset Insight