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M&G Real Estate acquires Minato Mirai Center in Japan for $997 mil

By Hailey Yu

/ EdgeProp Singapore |

October 5, 2022 2:40 PM SGT

Minato Mirai Center, the latest acquisition by M&G Real Estate (Credit: M&G Real Estate)

EDGEPROP (SINGAPORE) - M&G Real Estate has acquired Minato Mirai Center for more than $997 million, as announced on Oct 4.

The prime-grade office building in Yokohama was acquired on behalf of M&G Asia Property Fund.

“The latest acquisition is a continuation of our strategy to invest in Japan’s key gateway cities and develop assets in innovation clusters,” says Richard van den Berg, the fund manager of M&G Asia Property Fund.

With Tokyo-Yokohama now recognised as one of Japan’s most innovative global precincts, the fund will benefit from the continued return of workers into offices, he adds.

This marks the largest asset added to the fund and is part of a series of deals in Japan, providing geographical diversification and exposure to this rapidly growing asset class for investors.

Located 27km south of Tokyo, the Minato Mirai Center spans over one million sq ft across 21 floors. It has one of the highest occupancy rates in the Minato Mirai submarket, notable for its international and domestic tenants. The Minato Mirai Station is also directly accessible.

Minato Mirai Center is one of the few buildings in Japan to hold a five-star Casbee (Comprehensive Assessment System for Built Environment Efficiency) rating, the highest recognition of ESG performance available. State-of-the-art design provides maximum layout flexibility, solar light tracking, as well as reduced heat and carbon emissions.

The submarket is situated within Yokohama’s most prominent CBD and is set to become the nation’s first carbon-free location by 2023. With rents 45% lower than Tokyo’s CBD, Minato Mirai is emerging as a research and development (R&D) hub. Building specifications and government grants also incentivise businesses to relocate their headquarters and R&D facilities to this sub-market.

Japan’s office sector remains resilient with the majority of the country’s workforce opting to work from their offices, in contrast to its global peers, notes Jing Dong Lai, the CEO at M&G Real Estate Asia.

M&G Real Estate is part of M&G plc’s GBP76.7 billion ($125 billion) private assets and alternatives business.

“M&G Real Estate has a first-mover advantage amongst foreign firms in key gateway cities of Japan such as Yokohama. It has the second largest working population in the nation, given its proximity to Tokyo and lower rental costs,” Lai explains.

He anticipates Minato Mirai and Yokohama to benefit from the limited future office supply and the above-national average employment growth over the next few years.

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