TOKYO - US private equity firm Blackstone said it would buy the residential real estate arm of General Electric's property unit in Japan for more than 190 billion yen ($1.6 billion), as the country's land prices slowly recover from an asset bubble burst.
A general view of the skyline of Shinjuku in Tokyo pictured on August 13, 2014
The deal will see Blackstone Real Estate Partners Asia acquire the business that owns and operates more than 10,000 units in 200 properties, primarily in Tokyo, Osaka, Nagoya and Fukuoka, it said.
"We continue to believe strongly in the residential sector’s fundamentals, especially in Japan’s major cities," Alan Miyasaki, senior managing director at Blackstone, said in a statement issued Thursday.
"We are excited by the opportunity to invest in such a high-quality and well managed business."
The deal comes as GE, whose financial arm was hit hard during the 2008 global financial crisis, moves back to its industrial roots including a recent deal to buy most of French giant Alstom's energy assets for 12.4 billion euros ($15.6 billion).
Japanese real estate -- which had long been in a slump after an asset bubble collapsed in the late 1980s and the early 1990s -- is showing signs of recovery.
Recent government data showed land prices in the nation's three major cities -- Tokyo, Osaka and Nagoya -- rose 0.8 percent year on year by July 1, marking a second consecutive annual gain, although overall prices across Japan were still down 1.2 percent.