Lendlease and PGGM previously partnered on the Leaf Minatomirai conversion in Yokohama
Australian property giant Lendlease and Dutch pension manager PGGM have formed a Japan value-add partnership with investment capacity of up to JPY 120 billion ($738.8 million), targeting logistics and office properties in the country’s largest urban markets.
The Lendlease Japan Modernisation Partnership will initially focus on Greater Tokyo and Greater Osaka, acquiring well-located assets that can be upgraded and repositioned to meet changing occupier requirements, the companies said Friday in a release. ASX-listed Lendlease will hold a 5 percent minority co-investment in the vehicle.
The mandate extends a relationship spanning more than two decades and follows the partners’ 2022 establishment of a S$1 billion (then $720 million) Asia Pacific innovation and life sciences strategy, whose seed investment was the Leaf Minatomirai mall conversion in Yokohama.
“We are pleased to further extend on our longstanding collaboration with PGGM through this new partnership, which reflects our shared conviction in the long-term opportunities presented by the Japanese market,” said Lendlease investment management CEO Penny Ransom.
Modernisation Mandate
Lendlease will draw on its investment management, development and project management capabilities to enhance the performance of the new partnership’s properties through active asset management and physical improvements, it said. Potential projects include large-scale renovations, conversions, extensions and expansions.
Lendlease investment management CEO Penny Ransom (Image: Lendlease)
The Sydney-based group said the strategy builds on its value-add track record in Japan and adds to its growing suite of Asia Pacific investment vehicles, while remaining distinct from the company’s expanding data centre activities in the country.
PGGM manages investments for PFZW, the pension scheme serving 3 million participants in the Dutch health and welfare sector, and had €256.5 billion ($298 billion) in public and private markets under management at the end of March. The companies’ earlier collaborations include a £220 million (then $346 million) UK infrastructure fund formed in 2010.
“We believe the logistics and office sectors in Japan present attractive opportunities for modernisation to meet changing occupier requirements,” said Jikke de Wit, senior director of private real estate at PGGM.
Under their 2022 innovation partnership, PGGM held an 85 percent interest and Lendlease owned the remaining 15 percent while serving as investment, development, construction and property manager. The venture was seeded with the 12-storey Leaf Minatomirai property near Yokohama’s Minato Mirai research hub.
Lendlease and PGGM completed the conversion of the 2004-vintage mall into an R&D workplace in February 2024, upgrading the 24,206 square metre (260,551 square foot) property with new elevators, a revamped lobby and other improvements.
Leaf’s ownership vehicle later formed part of the seed portfolio of Vita Partners, the life sciences platform established by Lendlease and Warburg Pincus, before the asset was sold to undisclosed new owners in March 2025.
Global Capital
The Lendlease-PGGM launch comes as international investment managers deepen their exposure to Japan, with Blackstone in June securing a JPY 1.5 trillion commitment from Nippon Life Insurance under a strategic partnership spanning private credit and real estate.
The agreement will see Blackstone advise on efforts to improve the value of about a dozen Nippon Life properties, including large-scale urban offices. The Manhattan-based giant has said it plans to deploy $15 billion into Japanese real estate over a three-year period after buying Tokyo Garden Terrace Kioicho from Seibu Holdings for $2.6 billion in early 2025.
Brookfield has also stepped up its Japan campaign, agreeing in February to buy Dentsu Group’s 48-storey Tokyo headquarters for about JPY 300 billion. The Canadian manager had a year earlier deployed $1.6 billion into a 30 percent stake in the Meguro Gajoen complex and a Greater Nagoya logistics development, before pledging to invest more than $10 billion in Japan over five years.
Ares Management disclosed in May that it had drawn $1.6 billion in equity commitments for its fifth Japan industrial development fund, a strategy inherited through the firm’s $3.7 billion acquisition of GLP’s operations outside mainland China. Los Angeles-based Ares has also added three fully occupied Japanese warehouses and rebranded the properties under its Marq platform.
TPG highlighted its own Japan expansion in April by opening a consolidated Tokyo office at Mori Building’s Toranomon Hills complex for its private equity, real estate and secondaries teams. The Texas-based fund manager raised $2.5 billion in 2024 for TPG AG Asia Realty V and the Japan-focused TPG AG Japan Realty Value strategy.
TPG’s recent deployments include teaming with Kenedix to acquire the 882-room Grand Nikko Tokyo Daiba from Hulic in Asia Pacific’s largest hotel transaction of 2024.