PAG and KKR team up to take over Sapporo real estate — a major move by Asian capital

Asia’s alternative investment giant PAG and global investment firm KKR recently announced that their managed funds have signed a definitive agreement with Sapporo Holdings to acquire 100% equity of Sapporo Real Estate Company in a phased manner over three years. The first phase of the transaction is scheduled to be completed by June 1, 2026, at which point 51% of the equity will be acquired, with ongoing efforts to integrate the remaining shares. This deal marks the continued interest of international capital in Japan’s high-quality real estate assets.

Strategic Considerations for Phased Acquisition

This transaction adopts a three-year phased structure, with the initial purchase covering all operational bases of Sapporo Real Estate in Tokyo’s Shibuya (Ebisu) and Sapporo, Hokkaido. This gradual acquisition approach aims to ensure smooth transitions for local operations and maintain existing operational continuity. Sapporo Real Estate currently manages a diversified portfolio including commercial, office, hotel, and residential properties, with Yebisu Garden Place and Sapporo Factory being iconic projects in Japan.

Strategic Adjustment by Sapporo Holdings

With a history spanning over 140 years, Sapporo Holdings Group has had extensive布局 in beer, food and beverages, and real estate sectors. By selling its real estate business to PAG and KKR, Sapporo Holdings plans to focus resources on strengthening its core alcohol beverage operations—an area where the company has a competitive advantage. The proceeds from the sale of its real estate assets will primarily support growth initiatives in the alcohol beverage sector, aligning with the company’s mid- to long-term growth strategy announced in mid-February.

Advantages of PAG and KKR Collaboration

PAG, as a leading alternative investment firm in the Asia-Pacific region, has invested over $48 billion in real estate assets across Asia-Pacific, managing more than 7,800 properties. KKR is a major player in global capital markets with extensive experience in real estate, infrastructure, and other sectors. The partnership between these two organizations in acquiring Sapporo Real Estate aims to leverage their respective strengths—through international networks, operational expertise, and capital support—to drive sustained growth for Sapporo Real Estate and contribute to community sustainable development.

Hiro Hirano, Vice Chairman and Head of Japan at KKR Asia-Pacific, stated that Sapporo Real Estate has become a leading developer in Japan over the past thirty years, with an impressive portfolio of landmark projects. The collaboration aims to support the company’s next growth phase by fully utilizing KKR’s global investment experience and deep expertise in development, operations, and hotel management.

Jon-Paul Toppino, Co-Founder and President of PAG, emphasized that the company is committed to strategic cooperation with KKR and Sapporo Holdings to support the management and development of Sapporo Real Estate, and to promote the ongoing evolution of the Shibuya area. Through close collaboration with communities, governments, and tenants, both parties aim to transform the company’s iconic properties into vibrant, sustainable urban destinations.

Market Significance of the Transaction

The first phase of the transaction is expected to be completed by June 2026, with subsequent progress subject to regulatory approvals and routine closing conditions. After the transaction is finalized, Sapporo Real Estate will operate as an independent entity, pursuing sustainable growth in property and enterprise value under the ownership of PAG and KKR. This deal reflects international capital’s confidence in Japan’s mature real estate market and highlights the important role of large Asian investment institutions in global real estate allocation.