The Dai-ichi Life Insurance Company and Italian insurance company Generali have joined forces to acquire residential rental buildings in Tokyo. With current government bonds offering low yields (1.2% for 20-year bonds), the insurance giants are looking at diversification their portfolio. This will be Generali’s first real estate investment in the Asia region.
The two companies have formed a joint private placement fund targeting residential buildings in Tokyo that meet the following:
- Less than 15 years old
- Occupancy rates over 90%
- Apartments catering to singles and DINKS
- Buildings containing studios ~ 2-bedroom apartments
- In locations with good transport and less than 10 minutes walk from the nearest station
- Studio apartments that rent for around 100,000 Yen/month, or apartments for DINKS that rent for under 150,000 Yen/month
They are seeking gross yields over 6.6% with depreciated returns in the 3% range.
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