KREST Purchases Multifamily Portfolio in Japan

Rhea-AI Summary

KKR Real Estate Select Trust Inc. (KREST) has acquired a portfolio of 39 newly built multifamily properties in Tokyo, Japan. This investment, part of KREST’s stabilized real estate strategy, is expected to generate stable cash flows due to a master lease with a leading property manager ensuring 100% occupancy. With KKR managing approximately US$64 billion in assets globally, this acquisition highlights KREST's focus on high-quality, income-producing real estate in a strong market. KREST aims for attractive current income and long-term capital appreciation.

Positive

• Acquisition of a portfolio of 39 newly built multifamily properties in Tokyo, Japan.
• Portfolio features 100% occupancy rate under a master lease, ensuring stable cash flows.
• Investment aligned with KREST's strategy focusing on income-generating real estate.
• Tokyo's residential market is recognized for its strength and stability.

Negative

• None.

NEW YORK & TOKYO--(BUSINESS WIRE)-- KKR, a leading global investment firm, today announced that KKR Real Estate Select Trust Inc. (“KREST” or the “Fund”) has completed the purchase of a portfolio of 39 newly built multifamily properties in Tokyo, Japan (the “Portfolio”).

“Japan is the world’s second-largest real estate market and an important priority for KREST as we continue to construct a broad and resilient portfolio of high-quality properties across the globe.ⁱ This transaction exemplifies KREST’s flexible geographic mandate, which widens our aperture for potential investments and enables us to pursue attractive opportunities in varied market environments. The sourcing of this investment was made possible by KKR’s deep local presence in Japan,” said Billy Butcher, Chief Executive Officer of KREST and Chief Operating Officer of KKR’s global real estate business.

The Portfolio was delivered in 2022 by a premier Japanese developer. The properties were master-leased to a leading Japanese residential property manager with a contractual 100% occupancy rate, providing KREST with anticipated stable and dependable cashflows. The 39 newly built multifamily properties feature modern designs and are situated in 15 popular residential submarkets with convenient access to local train stations and Tokyo’s large transportation hubs.

“Tokyo’s residential sector is prized by investors for its exceptional strength and stability, which makes this multifamily portfolio a suitable fit for KREST’s focus on stabilized income-producing real estate with long-term asset appreciation potential,” said Kensuke Kudo, a Director on KKR’s real estate team in Japan. “Urbanization is a significant demographic trend in Japan, and combined with Tokyo’s aging supply of residential properties, these newly built properties are poised to be highly sought-after by renters. We are grateful to the seller and our local partners for working with us to deliver this investment for KREST.”

The investment is part of KREST’s stabilized real estate investment strategy – one of the Fund’s three primary strategies – which focuses on thematically driven, income-generating real estate. KREST’s other focus areas include prime single tenant real estate and private real estate debt.

KKR has been investing in Japan across asset classes with a dedicated local team since 2006. In 2022, KKR strengthened its presence in the market and deepened its real estate capabilities by completing the purchase of KJR Management, a leading real estate asset manager which oversees two Japanese REITs. Japan is a key part of KKR’s global real estate strategy. KKR’s global real estate team manages approximately US$64 billion in assets as of September 30, 2022, and has dedicated investment professionals in 16 offices across the U.S., Europe and Asia Pacific.

About KREST
KKR Real Estate Select Trust Inc. ("KREST") is a continuously offered, registered closed-end fund that thematically invests in high quality, stabilized, income-oriented commercial real estate equity and debt. The fund is open to all investors with daily subscriptions and its primary investment objective is to provide attractive current income, with a secondary objective of long-term capital appreciation. KREST is managed by KKR Registered Advisor LLC, an affiliate of KKR & Co. Inc., and utilizes the experience and reach of KKR's global real estate team and the resources available through the KKR platform. For additional information about KREST, please visit its website at www.krest.reit.

About KKR
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

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ⁱ Japan is the second largest real estate market in the world according the MSCI Real Estate Market Size Report 2021/2022

View source version on businesswire.com: https://www.businesswire.com/news/home/20221215006026/en/

Media

KKR Americas

Miles Radcliffe-Trenner

+1 212-750-8300

Media@kkr.com

KKR Asia Pacific

Anita Davis

+852 3602 7335

Anita.Davis@kkr.com

Source: KKR & Co. Inc.

FAQ

What did KKR announce regarding KREST on December 15, 2022?

KKR announced that KREST has completed the acquisition of 39 newly built multifamily properties in Tokyo, Japan.

How does this investment impact KREST's strategy?

The investment is part of KREST's stabilized real estate strategy, focusing on high-quality, income-generating properties.

What is the occupancy rate for the properties acquired by KREST?

The properties have a master lease ensuring a contractual 100% occupancy rate.

Why is Tokyo considered a strong market for KREST's investment?

Tokyo's residential sector is prized for its exceptional strength and stability, making it an attractive investment opportunity.

What is the total asset management of KKR as of September 30, 2022?

KKR manages approximately US$64 billion in assets globally.