Taking advantage of defaulted commercial backed securities, privately held MGPA has reportedly paid 12 billion yen ($152 million U.S.) for eight office buildings totaling 350,000 gross square feet in Japan.
MGPA is partially owned by Macquarie Group Ltd., Australia's largest investment bank. MGPA manages $11 billion in international assets.
Seven of the properties are in Tokyo. The eighth building is in Yokkaichi City in the Tokai region, an area between Tokyo and Osaka.
MGPA's news release didn't confirm the speculated price for the properties. The acquisition was made through MGPA Asia Fund III, which also has properties in Singapore and China.
Office property prices in Tokyo have declined about 40 percent from their peak in 2007, according to CBRE Group Inc.
In a prepared statement, Rio Minami, managing director, capital transactions - Japan, MGPA, said: "This is an exciting and meaningful acquisition for Asia Fund III.
"In light of the high yields in Japan's real estate market and early evidence of stronger tenant demand in Tokyo, we are confident of delivering a solid return on investment in the short-term as well as growth potential over the projected holding period."
Minami adds, "The supply of new space in the Tokyo office market over the next several years will be 30 percent below the long-term average.
"With good prospects for economic growth in Japan relative to much of the developed world, demand for office space could well surprise on the upside. We are already seeing strong interest in the vacant space in the portfolio from potential tenants."
Moody's Investors Service estimates about 600 billion yen to 700 billion yen of defaulted debt is set to be redeemed in the next two years.
In May, Standard & Poor's noted the first default in Japan on CMBS-rated loans occurred in the second quarter of 2008. The default total increased to 137 cases loans totaling 950 billion yen as of March this year.
Lenders have recovered about 501 billion yen after the underlying properties were sold, S&P stated.
Established in 2007, MGPA Asia Fund III is a closed-ended fund which has equity commitments of $3.9 billion U.S. across the Asia region. The portfolio includes commercial and residential properties in Japan, Singapore, China and Thailand.
Reuters reports MGPA has been looking at opportunities in Japan as more real estate loans mature, while lenders sell assets from borrowers unable to repay or refinance.
The total return for Japanese real estate investment stood at 3.7 percent for the year to February, slightly up from 3.4 percent in the year to December, according to property firm IPD. ($1 = 78.9100 Japanese yen)