We consider efficient communications over the multiple-input multiple-output (MIMO) multiway distributed relay channel (MDRC) with full data exchange, where each user, equipped with multiple antennas, broadcasts its message to all the other users via the help of a number of distributive relays. We propose a physical-layer network coding (PNC) based scheme involving linear precoding for channel alignment nested lattice coding for PNC, and lattice-based precoding for interference mitigation, We show that, with the proposed scheme, distributed relaying achieves the same sum-rate as cooperative relaying in the high SNR regime. We also show that the proposed scheme achieve the asymptotic sum capacity of the MIMO MDRC within a constant gap at high SNR. Numerical results demonstrate that the proposed scheme considerably outperforms the existing schemes including decode-and-forward and amplify-and-forward.