Real estate investment manager M&G Real Estate has completed the divestment of Frontier Shinjuku Tower, a 24-storey mixed-use building located in the Nishi-Shinjuku area of Tokyo.

The firm finalised the sale 15 months ahead of its initial business plan. The transaction followed a dedicated asset enhancement programme aimed at boosting operational performance and resident experience, which resulted in a 23% increase in net operating income during the holding period.

Situated near Hatsudai and Shinjuku stations, the development features 298 residential units alongside dedicated office and retail space. High occupancy was maintained throughout M&G’s ownership, with rental growth achieved across both new tenant agreements and lease renewals.

M&G initially acquired the property in December 2023 under its Asia value-add strategy. Subsequent works included upgrading communal spaces, refining underused areas, enhancing fitness amenities and executing sustainability measures. These environmental upgrades helped the property earn a CASBEE S rating, which represents the top tier under Japan’s green building evaluation framework.

The sale illustrates M&G’s value-add capability in Asia, where the firm has operated a separately managed account targeting residential, office, logistics, hospitality and alternative assets since 2019.

Jing Dong (JD) Lai, Chief Executive Officer and Chief Investment Officer of M&G Real Estate Asia, said: “Tokyo’s residential market continues to benefit from strong demand and limited supply in well-connected locations. Frontier Shinjuku Tower presented an opportunity to acquire a high-quality asset and create additional value through targeted improvements and active management. The strong income growth achieved during our ownership, combined with an accelerated sale, demonstrates how local market expertise and disciplined execution can deliver attractive outcomes for investors.”

M&G Real Estate forms part of M&G’s USD 110 billion private markets division. The group also expanded its European value-add footprint in 2024 through the acquisition of BauMont Real Estate Capital.