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KKR to buy Japanese real estate asset manager for $2B

NY investment firm acquiring Mitsubishi Corp-UBS Realty

KKR's Joseph Bae and Scott Nuttall (KKR, iStock)
KKR's Joseph Bae and Scott Nuttall (KKR, iStock)

Private equity giant KKR is paying $2 billion to buy Japan’s Mitsubishi Corp-UBS Realty in an all-cash deal that bolsters its assets by a third and deepens its presence in Japan.

KKR is buying the Tokyo-based real estate asset manager from Mitsubishi of Japan and UBS Asset Management of Switzerland, according to an SEC filing by the company. The transaction is expected to close in April.

The Japanese joint venture, formed in 2000, is a pioneer in Japanese real estate investment trusts and became one of the nation’s largest real estate managers in Japan. It manages two Tokyo Stock Exchange-listed J-REITs, Japan Metropolitan Fund Investment Corporation and Industrial & Infrastructure Fund Investment Corporation, and oversees $15 billion of assets.

“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,” said Hiro Hirano, CEO of KKR Japan.

The acquisition will expand KKR’s global real estate business to $55 billion, from $41 billion.

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KKR, founded in 1976 as Kohlberg Kravis Roberts & Co., has made a big push into global real estate. Its real estate arm was founded in 2011, and now has 12 offices in nine countries, according to its website. While late to the real estate game, it’s catching up to its biggest rival Blackstone Group, the largest landlord in the U.S.

Last fall, it bought the observation deck at 30 Hudson Yards in New York for $500 million after moving its headquarters there in 2019. At the start of this year, it closed on a $4.7 billion deal to buy the annuity company Global Atlantic, which means it’s now competing with insurers in making big commercial mortgages.

In October, KKR closed its largest real estate fund, raising $4.3 billion. It’s also been buying billions of dollars of warehouses around the country.

It’s also got new blood. In October, KKR’s billionaire co-founders Henry Kravis and George Roberts stepped down to make way for their protégés, Joseph Bae and Scott Nuttall, who now serve as co-CEOs.

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