News, Events and Media
Hong Kong investor acquires a commercial property in central Tokyo
According to Nikkei Real Estate Market Report, an undisclosed HK individual investor acquired “VEXA Omotesando”, an retail property in Omotesando, high-end retail/shopping area in central Tokyo. The seller is TMW Pramerica Property Investment (TMW), the German real estate investment sub of US Prudential Financial. They acquired the property in May 2008 as an asset in their open-ended fund, TMW Immobilien Weltfonds.
The property was built in 2005, and has three floors above ground and one below with gross floor area of 791 sqm. The purchase price is JPY 1.45 billion. According to TMW, they started the sales process in August, 2012, and have heard interest in the property from 184 investors, both institutional and individual.
Announcement by TMW in Germany;
RREEF acquired mixed-use building, second purchase in Osaka
Deutsche Bank announced that RREEF, their real estate investment subsidiary, acquired “Coffret Umeda”, a mixed-use building located in Umeda, CBD Osaka. The property, “Coffret Umeda”, was built in November 2011, and has 11 floors above ground and 3 below with gross floor area of 5.396 sqm.
It is currently 100% occupied with 15 tenants, including the key tenant, Shinsei Bank. The location is in the Umeda Re-development area, and quite attractive for both office and commercial use. It is only 5 minutes walk from JR Osaka station, and is directly linked to a subway station and the popular underground shopping area in Osaka.
According to Nikkei Real Estate Market Report on January 11, RREEF intends to incorporate the building as a rental property into a fund formed for a German investor, believed to be a major German pension fund. In around one year ago, RREEF also purchased the commercial building where the flagship store of g.u., Uniqlo’s second line clothing brand, occupied, located in Shinsaibashi, the most popular shopping district in Osaka for believed-to-be the same pension fund.
Although the purchase price of “Coffret Umeda” was not disclosed, it is rumored to be approximately JPY 7.5 billion.
Please see the following announcement by Deutsche Bank;
German fund makes first investment in Japan
According to Nikkei Real Estate Market Report, iii-investments, a fund management company of a German bank, acquired four residential properties in Tokyo and Yokohama in November. The total acquisition price is approximately JPY 5.7 billion. It is the first time for iii-investments ever to acquire property in Asia. All the four properties were built in 2006 and are currently almost fully occupied.
The investment in Japan is solely funded by a single major German pension fund. The Investor plans to acquire various types of real estate properties other than residences and to build a diversified portfolio in Japan of triple digits million euros.
W. P. Carey acquires warehouse property in Japan
W. P. Carey, the operator of a US publicly held REIT, announced that their affiliated REIT has acquired a warehousing property located in suburban Tokyo, and this is their first investment in Japan. The subject property is two buildings that comprise warehouse and distribution facilities and the land of 129,500sqm under the buildings. The subject facilities are leased to Wanbishi Archives, one of the largest information/documents management companies in Japan. The acquisition price is approximately JPY 4.6 billion (equivalent to USD 55 million). Financing was provided by Mitsubishi UFJ Leasing and finance company.
W. P. Carey is a US publicly traded REIT with their origin goes back to 1973. They specialize in long-term sale and leaseback and build-to-suit financing for companies’ real estate demand. They currently have approximately USD 12.7 billion asset under management.
For further details, please see the following announcement;
Fortress plan to raise JPY 130 billion for opportunity fund
Nikkei newspaper reported that Fortress Investment Group, the US based investment manager, will set up an opportunity fund to invest in special situation financial instruments associated with real estate finance in Japan. The targeted investors are mostly Japanese pension funds and endeavored to raise JPY 130 billion by the year end. They would like to start investing from the beginning of next year.
The fund’s primary focus is to invest in CMBS structured and issued before the 2008 financial crisis. They expect to purchase these instruments at a deep discounted price primary from regional financial institutions.
Malaysia’s Dijaya investing JPY60bn in Okinawa resort
According to Nikkei Real Estate Market Report, Dijaya Corporation BHD, a Malaysian commercial real estate developer and manager, and Kincho Town in Okinawa reached an agreement whereby Dijaya will lease about 16 hectare of a former U.S. military training site from the municipality. The term of the lease is not disclosed.
Under the plan, Dijaya will construct a five star hotel with 200 guest room and a commercial facility, together with condominium development project. The total investment amount will be around JPY 60 billion.
GE Real Estate acquires Simplex office portfolio
According to Nikkei Real Estate Market Report, GE Real Estate Japan, a General Electric subsidiary, acquired three rental office buildings in Tokyo and Yokohama City between May and June of this year. The seller of the three properties was a SPC, believed to be an affiliate of Simplex Investment Advisors.
GE Real Estate Japan has refrained from new investment in Japan since 2008 financial crisis. They, however, recommenced the properties acquisition in 2012.
Goodman and ADIC jointly invest in development of logistic facilities
Goodman Japan announced that they have established the Goodman Japan Development Partnership (“GJDP”), a 50/50 venture between Goodman and the Abu Dhabi Investment Council. A combined USD 500 million of equity has been allocated to this venture and, with leverage capacity of the Partnership allowing an initial investment target in excess of USD 1 billion.
GJDP will target logistics development opportunities with initial focus on Tokyo and Osaka. They have secured two land parcels in Tokyo bay area and one in Osaka bay area, and will conduct three logistics development projects with a planned total gross leasable area of 250,000 sqm and an estimated property value in excess of JPY 55.5 billion.
MGPA raised Euro 85 million from German investors for investing Asian RE
MGPA, a private equity real estate advisor, announced that they have raised EU 85 million exclusively from German institutional investors in a first close of its MGPA Asien Spezialfonds. The core-plus Asian real estate fund has an eventual equity target of EU 500 million and it will focus on low-risk real estate investments in established market in Asia Pacific region, such as Japan, Australia, Hong Kong, Singapore and Malaysia. They think that Japan, Australia and Hong Kong especially provide low-risk attractive opportunities at the moment and focus office and commercial properties in these areas.
For further details, please see the following MGPA announcement:
AXA and Sumitomo Mitsui Trust close Tokyo funds
Nikkei newspaper reported that AXA group, the French insurance giant, will start investing in real estate market in Japan. AXA, together with Sumitomo Mitsui Trust, will establish a private fund investing primarily in office buildings in metropolitan Tokyo.
They will close their first fund on August 31, with AXA managing to raise funds from foreign investors and Sumitomo Mitsui Trust from domestic investors. Initial asset under management would be JPY 20 billion including borrowings. They plan to make their first acquisition in Q4, 2012. Their long-term plan is to expand its AUM to JPY 100 billion, with 50% equity and 50% borrowing. Their investment target is medium-sized rental office buildings in the price range of JPY 3 to 10 billion.
SEB Asset Management acquires commercial building in Osaka
SEB Asset Management announced that it is acquiring partial ownership of the mixed-use “Abeno Nini” commercial building in central Osaka. The property was completed in February, 2012, and has 24 floors above ground and 2 below with gross floor area of 9,035 sqm. The property is for office, hotel and retail use, and is currently 100% occupied with the average remaining lease terms of 12.8 years. The total acquisition price is JPY 7 billion, and the seller is a local developer.
Singapore’s Saizen acquires 3rd Tokyo apartment
Saizen Real Estate Investment Trust announced that they acquired a rental apartment “Cosmo Reveur Sangenjaya” in Setagaya-ward, metropolitan Tokyo. The purchase price was JPY 590 million.
Saizen is a Singapore-based REIT that invests in residential properties across Japan. This is their third investment in metropolitan Tokyo.
Please see the portfolio list of Saizen in the following website:
Sekisui REIT acquired residential property from Morgan Stanley
Sekisui House REIT announced that they acquired a residential property in Sasazuka, Shibuya-ward, quite a convenient residential area in metropolitan Tokyo. It locates in 5 minutes walk from Sasazuka-station in Keio Line, a popular commuter line. Access to Shinjuku, western center of Tokyo, only took 5 minutes by the commuter line. The seller is a SPC, believed to be an affiliate of an German open-end fund run by Morgan Stanley.
The purchase price is JPY 2.83 billion. The property was built in 2004, and has total floor area of 4,263 sqm and total rentable area of 3,702 sqm. Current occupancy rate is 87.4%. Expected NOI from the property would be JPY 149.5 million. Thus, the initial NOI yield would be 5.3%.
CapitaMalls acquires Olinas Mall for JPY 22.8 Milliarden
CapitaMalls Asia, a Singapore based shopping mall operator, announced that they acquired Olinas Mall, a mixed-use facility located near JR Kinshicho Station, 9 minutes train ride from JR Tokyo Station, in metropolitan Tokyo. The purchase price was JPY 22.8 billion and the seller was a fund managed by Invesco Global Real Estate Asia Pacific, a subsidiary of US fund manager, Invesco.
The facility has retail space of about 35,000 sqm, with 853 parking lots, and is currently at 100% occupancy. The facility was built in March 2006. The mall location has a catchment of over 1.2 million people within a 5km radius, and is also a walking distance from Tokyo Skytree, the world tallest broadcasting and observation tower and the latest tourist attraction in Tokyo.
For further details, please see the following announcement by CapitaMalls;
MGPA acquires multi office portfolio in Japan
MGPA, a multinational private equity real estate investment advisory company, announced its acquisition of eight office properties, all but one located in Tokyo, on behalf of MGPA Asia Fund III. The purchase was accessed via a defaulted CMBS structure. Seven Tokyo properties comprise 97% of the acquisition value and five out of seven are located in Tokyo’s central five wards. The portfolio has a total gross floor area of approximately 32,500 sqm. The purchase price was not disclosed.
The Company cites the rationale of acquisition as good prospects for economic growth in Japan relative to much of the developed world, adding that demand for office space could well surprise on the upside.
For further information, please see the following MGPA announcement:
LaSalle invests JPY 7 billion in Atsugi logistics development
According to Nikkei Real Estate Market Report, in May 2012, a fund managed by LaSalle Investment Management began construction of the Atsugi Logistics Center, a build-to-suit logistics facility on the 24,168 sqm land in Atsugi-city, south west suburban Tokyo. The property will have gross floor area of 52,375 sqm and is expected to be completed in April 2013. Total development cost is estimated to be approximately JPY 7 billion yen.
Saizen REIT acquires Sapporo residence
Saizen Real Estate Investment Trust, a Singaporean REIT, announced acquisition of a rental apartment building in Sapporo City. With 1.9 million citizens Sapporo is the largest city of northern island Hokkaido. The purchase price was JPY 531 million. The property was built in 2007 and has 11 floors above ground and one below with 70 units and 24 parking lots. At the time of acquisition, the occupancy rate on an income basis was 85%, and the annual gross income and net operating income (NOI) are JPY 55.2 million and JPY 38.3 million respectively. Thus, the current investment yield is 7.2%.
Saizen REIT was listed in November 2007, and has invested exclusively in Japanese residential properties. The REIT invested in 6 properties between November 2007 and May 2008. In December 2011 the REIT resumed new investment with the above stated apartment building being the fourth purchase since then.
For information on the REIT’s portfolio:
Series of logistics developments going on in greater Tokyo
According to Nikkei Real Estate Market Report, Logistics facilities have recently been developed quite actively in the greater Tokyo area. GL Properties, Japanese arm of the Singaporean REIT, Global Logistics Partners (GLP), will develop three facilities. GLP Atsugi, one of the three projects, is located in Atsugi-city, south west suburban Tokyo, and will have gross floor area of approximately 110,000 sqm. The construction will start in November 2012 and is expected to be completed in December 2013. The total development cost is estimated to be JPY 13.5 billion. GLP Atsugi is the third development under Japan Development Fund, a 50/50 joint venture between Global Logistics Partners and the Canada Pension Plan Investment Board.
ProLogis, a US REIT, decided to develop two facilities. One of them is ProLogis Parc Narashino IV that will have gross floor area of 110,000 sqm, and is located in Narashino City, eastern suburban Tokyo.
Orix Real Estate, a real estate development arm of Orix Group, commenced construction of four logistics facilities in suburban Tokyo.
For further detail of GLP Atsugi, please see the following announcement of GLP.
Foreign Investors increase real estate investment in Japan
Nikkei Newspaper reported in its headline page as follows: Foreign investors intend to expand real estate investment in Japan again. For instance, Goldman Sachs will establish a private fund, targeting for pension funds, for investing primarily in office buildings in metropolitan Tokyo. A fund of this kind is the first one since 2008 financial crisis for Goldman Sachs. Goldman intends to raise JPY 100 billion at this fund.
Goldman Sachs has long been regarded as a prototype foreign investor in Japan, and has invested cumulative JPY 1 trillion in real estate market since 1997. They, however, have stopped in investing in real estate since 2008. Thus, their new fund would be a symptom of change in foreign investors’ sentiment in investing in Japan.
TPG Capital, an US private equity fund, also intends to invest Japanese real estate market. They will purchase and manage a real estate developer under bankruptcy protection, and intend to invest JPY 50 billion for condominium development in the coming 2-3 years. On another front, LaSalle Investment Management, an US real estate investment company, has purchased an office/commercial real estate complex in Osaka.
These foreign investors expect Japanese real estate market would bottom out soon. According to DTZ, an UK real estate research firm, the level of office rent in metropolitan Tokyo has dropped since 2007, but would be level-off later this year due to improvement in general business condition and profitability. Foreign investors see that yield in Japanese real estate market is generally more attractive, compared to other markets in the world.
Singapore’s Saizen acquiring 2nd Tokyo apartment
Saizen Real Estate Investment Trust, a Singapore-based REIT, announced the completion of the acquisition of Ams Hatchobori I, a rental apartment building located in CBD, Tokyo. The purchase price is JPY 1.12 billion and the seller is an independent party. The building was built in 2004, and comprises 44 residential units. The building currently generates JPY 64million net operating income, with the occupancy level of 97%. Thus, the net operating income yield is currently 5.7%.
For further details, please see the REIT’s announcement:
Singapore’s RECAP opens Mercure Hotel Okinawa
According to Nikkei Real Estate Market Report, Real Estate Capital Asia Partners (RECAP), the real estate fund managed by Singapore-based SC Capital Partners, opened Mercure Hotel Okinawa Naha, in Naha City, Okinawa prefecture. The hotel provides 260 rooms. SC Capital Partners is the sponsor of Japan Hotel REIT, which also operates Hotel Nikko Alivila and The Beach Tower Okinawa in Okinawa prefecture.
TPG and Savills to sponsor Joint Corp
Joint Corporation, a real estate developer under court protection, announced that its sponsors have changed to TPG Savills Financial Holdings, a joint venture between TPG Capital, an US private equity fund, and Savills, a British real estate management company. The new sponsor bought all shares in Joint Corporation owned by the previous sponsor Reno.
According to Nikkei newspaper on May 25, the new sponsors intend to invest JPY 50 billion for condominium development in the coming 2-3 years.
MGPA purchases Ginza Yon-Chome Tower
According to Nikkei Real Estate Market Report, MGPA (formerly Macquarie Global Property Advisors) acquired Ginza Yon-Chome Tower in Ginza, Tokyo. MGPA incorporated the building into a real estate fund for foreign institutional investors. The property was built in 2008, and is located in the centre of Ginza, one of the most prestigious upscale retail/commercial area in Tokyo. The property has 13 stories above ground and one below with gross floor area of 6,788sqm. The acquisition price was not disclosed.
Credit Suisse fund acquires Zara store building in Fukuoka
According to Nikkei Real Estate Market Report, a real estate fund operated by Credit Suisse Group acquired Zara Tenjin Nishi-dori in CBD, Fukuoka City in December 2011. Fukuoka-city and its surrounding area on Kyushu island is the fifth largest metropolitan area in Japan. The building is for commercial/retail use, with net rentable area of 1,497sqm. The acquisition price was not disclosed. The seller is a special purpose company of Nomura Real Estate Development who acquired this building in June 2008 at a purchase price of JPY 4.1 billion from REIT managed by Kenedix Realty Investment.
Singapore REIT CapitaMalls to fully own three commercial facilities
According to Nikkei Real Estate Market Report, CapitaMalls Asia Limited., Singapore based REIT, is set to become the sole owner of three commercial facilities in Japan, two in Kansai metropolitan area and one in Tokyo metropolitan area. CapitaMalls previously had approximately 26% interest in these three facilities. The acquisition price was around JPY 13.2 billion including the already owned portion. CapitaMalls is one of the largest shopping mall developer, owner and manager in Asia, and has interest in and manages a pan-Asian portfolio of 98 shopping malls in 51 cities in five countries including Japan.
Orix and Elliot to build a commercial property in Ginza, Tokyo
According to Nikkei Real Estate Market Report, a special purpose company jointly founded by Orix Real Estate and Elliott Management, the consulting arm of the hedge fund, Elliot Associates L.P., will begin construction of a commercial facility in Ginza, Tokyo in August 2012, with completion targeting December 2014. The new building to be constructed will have 12 stories above ground and three below with 16,975 m2 of gross floor area.
Sun Arrows acquires Kawasaki Tech Center from Australian REIT
According to Nikkei Real Estate Market Report, Sun Arrows Investment acquired Kawasaki Tech Center in Kawasaki City. The seller is Australian REIT Rubicon Japan Trust (RJT). Although the acquisition price has not been disclosed, it appears to be much lower than JPY 31 billion which was the acquisition amount at which RJT acquired the property in 2007. The B3/20F office and data centre facility was completed in 1988 and is located in Kawasaki-city in the Greater Tokyo Metropolitan Area, where many high-tech companies located their office and data-centre function. The buyer is a real estate investment advisor jointly owned by Taisei, one of the largest general contractors in Japan, Hulic, one of the Mizuho group real estate companies, and the Development Bank of Japan.
Hilton hotel Nagoya to be incorporated in new Singapore REIT
According to Nikkei Real Estate Market Report, Singapore’s M&L Hospitality Trusts is expected to be listed on the Singapore Securities Exchange in the near future. It is a REIT that will invest in hotels in the Asia Pacific region, including Japan, and Singapore’s maritime transport industry pioneer, the Kum family, is the sponsor. The AUM as of listing will be six properties at an amount of S$ 1.19 billion [US $960 million] in scale on an appraisal value basis. According to the preliminary prospectus submitted to financial authorities in the middle of April, M&L will incorporate Hilton Nagoya in Japan.
Kenzo Japan Real Estate GmbH startes Residential Fund Placement
Kenzo Japan Real Estate GmbH, a Munich (Germany) based real estate fund initiator has announced the start of the private placement of its first closed-end fund participating in investments in Japanese apartment houses. The fund targets raising up to JPY 2.4 billion in equity and will invest into residential real estate property in the Greater Tokyo area.
Saizen Real Estate Investment Trust announces the purchase of ‘The Palms Denenchofu’
Singaporean Saizen Real Estate Investment Trust announces the purchase of ‘The Palms Denenchofu’, a 30 residential units building in Denenchofu, Ota Ward, Tokyo. This is Saizen REIT’s first investment in a property in the Tokyo area. The Manager believes that yields of properties in Tokyo have risen to attractive levels in the last few years, with potential for capital gains and rental appreciation over the medium term.
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