Kenedix Inc., a prominent Tokyo-listed fund manager, is making its move on acquiring detached houses around Tokyo’s suburbs to rent out.

The first acquisition is 91 brand-new detached houses from Open House Group and Sanei Architecture Planning. Kenedix has also entered into a basic agreement with Open House, Sanei, and Iida Group Holdings to support the creation and expansion of the rental market for detached housing.

The fund will acquire houses in Tokyo, Kanagawa, Chiba, and Saitama Prefectures, with the goal of creating a rental market that provides flexible and sustainable lifestyle options for renters. With more company employees working from home as a result of the pandemic, there has been a growing need from consumers for houses with more rooms. The houses will primarily be two and three-story wood-frame homes with three or more bedrooms. 

Kenedix has identified a gap in the market for rental houses in the greater Tokyo area. Just 11.9% of the detached houses available for rent are over 70 sqm (753 sq.ft) in size. In terms of the new supply added each year, rental housing over 71 sqm (764 sq.ft) is just 5.2% of the total. The rental market has largely focused on single-occupant tenancies and largely ignored a need from couples and families. The majority of suburban housing is built for owner-occupiers rather than investors. 

Investors, too, have steered clear of the detached house market due to the small scale of each asset and limited liquidity, preferring to stick to blocks of apartment buildings that are easier to manage and operate. Kenedix is following a trend seen in the United States, as corporate landlords move into the suburbs.

Source: Kenedix Inc. News Release, August 31, 2021.