TOKYO (Reuters) - U.S. investment fund Fortress Investment Group will inject 57 billion yen ($540 million) in cash-strapped apartment rental firm Leopalace21 Corp 8848.T, the Japanese company said on Wednesday.
The investment by Fortress comes as Leopalace21, which leases affordable apartment units for their owners, said this week its liabilities exceeded assets by 11.8 billion yen as of June.
Leopalace21’s balance sheet had been squeezed by costs relating to repairing apartment buildings and falling rental income due to weaker demand due to the from the outbreak of the coronavirus.
Leopalace21 in 2018 disclosed defects in walls for the properties they manage, as well as issues relating to fire resistance and noise insulation.
The investment by SoftBank Group-owned 9984.T Fortress highlights its bet in Japan's housing market, which generates steady cash flow.
The U.S. investment group in 2017 bought almost 100,000 units of mostly aged apartment buildings from the Japanese government for about 60 billion yen.
Leopalace21, which operates almost 600,000 units nationwide, posted 434 billion yen in revenue for the year ended March.
($1 = 105.6100 yen)
Reporting by Junko Fujita; Editing by Rashmi Aich
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