In a strategic move to capitalize on shifting demographics and growing demand for quality rental housing in the Asia-Pacific region, PGIM Real Estate, a subsidiary of American finance giant Prudential, has expanded its rental housing portfolio. The US investment manager has sealed deals with local partners for significant acquisitions in Shanghai, China, Sydney, and Brisbane, Australia.
In the heart of China’s commercial capital, Shanghai, PGIM Real Estate spearheaded a joint venture to acquire an apartment building within the esteemed Shanghai Baoshan Powerlong City complex. The property, comprising over 500 apartments across 19 stories, was purchased from Hong Kong-listed Powerlong, the prominent developer. Chengjia (CJIA), an apartment operator under mainland hospitality giant H World Group, emerged as PGIM’s operating partner.
Strategically positioned within a commercial hub, including a shopping mall, office blocks, and hotels, the Baoshan Powerlong City property is designed to meet the long-stay living requirements of young professionals. The acquisition aligns with PGIM’s commitment to providing high-quality, professionally managed housing units with common areas and facilities like a gymnasium and lounge.
Venturing into the Australian market, PGIM collaborated with fund manager Point Capital on a residential-for-rent programmatic joint venture. This strategic partnership will see the development of projects in Sydney’s Parramatta area and Brisbane’s Fortitude Valley, each featuring 300 smaller-scale rental apartments. These locations, chosen for their proximity to key employment, residential, and entertainment hubs and accessibility to public transport, reflect PGIM’s keen focus on prime locations.
Benett Theseira, Head of Asia Pacific at PGIM Real Estate, highlighted the increasing demand for rental housing driven by changing demographics and escalating challenges in homeownership affordability. “The living sector in Asia Pacific is significantly undersupplied, presenting strong growth potential for investors,” noted Theseira. “The institutional residential market, which offers high-quality, professionally managed housing units, is nascent outside Japan.”
PGIM executed these acquisitions as part of its value-add, core, and core-plus strategies in the Asia-Pacific region. The company, managing a substantial $360 billion in assets, strategically positions itself to tap into the burgeoning demand for rental housing across major cities.
The Australian assets, located at 458 Wickham Street in Brisbane and 7 Macquarie Street in Sydney, have been strategically chosen due to their status as pivotal employment, residential, and entertainment hubs. PGIM aims to leverage these assets to contribute to the growing demand for professionally managed rental housing in the region.
These strategic acquisitions followed PGIM’s successful foray into Hong Kong last year, where it acquired two hotels and subsequently transformed into modern co-living apartments. Weave Studios Kowloon West, a joint venture with local developer Weave Living, is now a testament to PGIM’s ability to adapt to market conditions. This converted property boasts 435 fully furnished studio apartments, meeting the growing demand for contemporary, communal living spaces.
Moreover, Dash Living on Hollywood, a former Travelodge on Hollywood Road in Central, is transforming into a co-living facility with 148 rooms and tenant community facilities.
In challenging market conditions, PGIM remains optimistic about the rental housing sector. Benett Theseira expressed confidence in the sector’s ability to thrive despite market headwinds. “We believe the rental housing sector will benefit from favourable demographics and strong rental demand growth,” Theseira affirmed. “We expect the sector to provide the sustainable income and return investors seek in a volatile, inflationary environment.”
As PGIM fortifies its presence in the Asia-Pacific rental housing market, its strategic acquisitions underscore a commitment to meeting the evolving housing needs of the region’s dynamic demographic landscape. The synergy of global investment expertise and local market insights positions PGIM as a critical player in shaping the future of institutional rental housing in the Asia-Pacific region.
PGIM Real Estate has added to its Asia Pacific rental housing portfolio, with the US investment manager securing deals with local partners to acquire properties in Shanghai, Sydney and Brisbane.
In China’s commercial capital, PGIM led a joint venture to buy an apartment building within the Shanghai Baoshan Powerlong City complex from its developer, Hong Kong-listed Powerlong. Company representatives confirmed to Mingtiandi that the company’s operating partner in the acquisition is Chengjia (or CJIA), an apartment operator under mainland hospitality giant H World Group, formerly Huazhu Hotels Group.
In Australia, PGIM joined forces with fund manager Point Capital on a residential-for-rent programmatic JV seeded with a project in Sydney’s Parramatta area and one in Brisbane’s Fortitude Valley. Each is planned to have 300 smaller-scale rental apartments.
Benett Theseira, head of Asia Pacific at PGIM Real Estate, said shifting demographic trends and worsening homeownership affordability drive demand for rental housing across major cities.
“The living sector in Asia Pacific is significantly undersupplied, presenting strong growth potential for investors,” Theseira said. “The institutional residential market, which offers high-quality, professionally managed housing units, is nascent outside Japan.”
PGIM, a subsidiary of American finance giant Prudential, made its latest acquisitions for its value-add, core and core-plus strategies in Asia Pacific.
The 19-storey purpose-built apartment building at Baoshan Powerlong City comprises over 500 apartments and provides common areas and facilities, including a gymnasium and lounge, PGIM said. Part of a commercial hub with a shopping mall, office blocks and hotels, the property is targeted to meet the long-stay living needs of young professionals.
The Australian assets at 458 Wickham Street in Brisbane and 7 Macquarie Street in Sydney were selected as crucial employment, residential and entertainment hubs near public transport.
The JV with Point Capital, the firm behind the Tribe hotel chain, aims to develop two to three projects of similar size with an initial portfolio target of 1,250 to 1,500 beds at completion. The proprietary modular building method used in Tribe will be adopted to deliver the venture’s residential-for-rent projects.
“Our JV with Point Capital presents a very exciting opportunity as it will deliver much-needed rental stock into a significantly undersupplied residential rental market in Australia,” said Steve Bulloch, Head of Australia for PGIM Real Estate.
The transactions in Shanghai and Australia follow PGIM’s acquisition of two hotels in Hong Kong last year and their conversion into modern co-living apartments this year.
Weave Studios Kowloon West, a joint venture with local developer Weave Living, has been converted to 435 fully furnished studio apartments over 29 floors. Situated near Olympic MTR Station, the property formerly known as the Rosedale Hotel opened in May and offers 15,000 square feet (1,394 square metres) of open area with shared amenities.
Dash Living on Hollywood, a 22-storey former Travelodge on Hollywood Road in Central, is being transformed into a co-living facility with 148 rooms and tenant community facilities.
“Despite the challenging market conditions, we believe the rental housing sector will benefit from favourable demographics and strong rental demand growth,” Theseira said. “We expect the sector to provide the sustainable income and return investors seek in a volatile, inflationary environment.”
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