A subsidiary of NYC-based KKR & Co. Inc. has acquired all outstanding shares of Mitsubishi Corp.-UBS Realty Inc. from Mitsubishi and UBS Asset Management, a company release said.
“We are pleased to have supported Mitsubishi-UBS Realty's (MC-UBSR’s) development and operations over these past 20 years, and are proud to have grown MC-UBSR into Japan’s leading real-estate investment trust (REIT) manager,” Takuya Kuga, group CEO-designate, Urban Development Group of Mitsubishi, said in the release.
“Mitsubishi continuously strives to optimize and strengthen its business portfolio, and will continue to expand its real estate development and asset management businesses in Japan, led by its wholly owned subsidiaries, Mitsubishi Corporation Urban Development Inc. and Diamond Realty Management Inc., along with accelerating its initiatives in overseas real estate and large-scale urban development/management business," Kuga said.
The transaction, valued at $2 billion in U.S. dollars, has been approved and signed by all related parties, including UBS Group and UBS AG, formerly Union Bank of Switzerland.
“Mitsubishi and UBS Asset Management showed us unwavering support over the years, enabling MC-UBSR to become Japan’s outright top J-REIT manager,” Katsuji Okamoto, president and CEO and representative director of MC-UBSR, said. “We are excited to welcome KKR, which brings significant resources and relationships to MC-UBSR, and is well-placed to work with our experienced team to extend our long and successful track record of delivering strong results for the unitholders of Japan Metropolitan Fund Investment Corp. (JMF) and Industrial & Infrastructure Fund Investment Corporation (IIF) and take the business to the next level.”
With $15 billion in assets under management, the joint venture, founded in 2000, is considered the largest Japanese real estate asset manager. Approximately 170 experts manage the business's two Tokyo Stock Exchange-listed REITs: JMF and IIF.
Specializing in retail, offices and hotel investments, JMF most recently reported $11 billion (U.S. dollars) in assets under management. Earlier this year, IIF, focusing on industrial and infrastructure properties, reported $4 billion (U.S. dollars) in assets under management. According to the company release, both REITs have established environmental, social, governance (ESG) programs, and now form part of the MSCI Japan ESG Select Leaders Index.
This transaction will not impact UBS’ Japanese-based asset management, wealth management and investments.
“Japan is one of the most important and high-volume real estate markets in the world, and is a market we have been dedicated to investing in with a local team since 2006,” Hiro Hirano, CEO of KKR Japan and co-head of Asia Pacific Private Equity at KKR, said. “MC-UBSR has an excellent track record of serving investors across its REIT offerings and a strong commitment to enhancing its investments through a strategic approach to ESG.”