News, Events and Media
Mori Hills REIT raised JPY 10.5 billion, acquires 2 office properties
Mori Hills REIT, a J-REIT sponsored by Mori Building, announced that they will raise JPY 10.5 billion, and that they will acquire additional partial interest in 2 office buildings that the sponsor, Mori Building, developed and currently partially owns. The total purchase price is JPY 20 billion and the seller is the sponsor, Mori Building. The REIT currently has AUM of JPY 210.8 billion with 9 properties.
One of the property, “Atago Green Hills”, is an office/residential/commercial complex built in 2001. The REIT currently has 45% interest in the property and will acquire additional 29%, resulting 74% ownership interest in the property. Remaining 26% will continue to be owned by Mori building. Purchase price is JPY 16.5 billion. Expected NOI and NOI yield are JPY 781 million and 4.7%, respectively. The other property, “Ark Hills”, is the old flagship office property of Mori Building. It was built in 1986. The object of acquisition is the cooling/warming and hot water supply system of the property that Mori Building operates and correspond to 2.3% ownership of the property. Mori Building will continue to operate the system and will pay fixed rent. Purchase price is JPY 3.5 billion. Expected NOI and NOI yield are JPY 204 million and 5.7% respectively. Both properties are located in CBD, Tokyo.
For further details, please see the following announcements:
Frontier REIT raises JPY 16.4 billion, acquires commercial property in Hiroshima-city.
Frontier REIT, a J-REIT sponsored by Mitsui Fudosan and specialized in commercial properties, announced that they will raise JPY 16.4 billion by secondary offering and that they will purchase a shopping mall in Hiroshima-city for JPY 5.4 billion. Frontier currently has AUM of JPY 266.2 billion with 28 properties.
The property, “Mitsui Shopping Park ALPARK – East Building”, is located in suburb of Hiroshima-city, the largest city in Chugoku region (western Honshu Island) with population of 1.2 million. It is the largest shopping mall in Chugoku region with gross floor area of 64,721 sqm., currently occupied by 158 tenants. It was opened in 1990. The seller is an SPC associated with Mitsui Fudosan, the sponsor of the REIT. The property will continue to be leased to Mitsui Fudosan at the fixed annual rent of JPY 530 million after the sale. Expected NOI and NOI yield are JPY 353 million and 6.5%, respectively.
For further details, please see the following announcements;
Fukuoka REIT raises JPY 9.2 billion, acquires a hotel and an apartment
Fukuoka REIT, a J-REIT sponsored by Fukuoka Jisho, a regional developer in Fukuoka-city, announced that they will raise up to JPY 9.2 billion by secondary offering and that they will acquire a hotel in Oita-city and a rental apartment in Fukuoka-city. The purchase price of the hotel is JPY 1.53 billion and of the rental apartment is JPY 2.8 billion. The REIT currently has AUM of JPY 156 billion with 20 properties.
The hotel, “Hotel Forza Oita”, is a business hotel and is located in CBD Oita-city, eastern center of Kyushu Island with a population of approximately 500,000. It was built in 2008, and has 10 floors above ground with gross floor area of 5,758 sqm. The hotel is currently leased to an operating company with 15 year contract with fixed rent, and expected NOI and NOI yield is JPY 107 million and 7.0%, respectively. The seller is Fukuoka Josho, the sponsor of the REIT.
The rental apartment, “The Wing Tower”, is located in the center of CBD Fukuoka-city, the largest city in Kyushu Island with population of approximately 1.5 million. The location is a walking distance from the busiest office/commercial area of the city. It was built in 2006 and has net rentable area of 7,188 sqm., accommodating 126 apartments and 10 stores. The seller is a third party.
Accommodation Fund raises JPY 21.4 Billion, acquires 12 properties
Nippon Accommodation Fund, a J-REIT specialized in residential properties and sponsored by Mitsui Fudosan, announced that they will raise up to JPY 21.4 billion by secondary offering. At the same time, they will acquire 12 rental apartments for the total purchase price of JPY 17.6 billion. The Fund currently has AUM of JPY 242 billion with 90 properties. All of the 12 properties will be acquired from Mitsui Fudosan, the sponsor, or other related parties.
11of the 12 properties are located in CBD Tokyo or in areas adjacent to CBD Tokyo, and they all have very good access to most of the busiest business/commercial districts in Tokyo. One property is located in Yokohama-city, and it is only one station away from JR Yokohama Station. All the properties are fairly newly built, and even an oldest property is seven-year old.
Frontier REIT acquires a commercial complex
Frontier REIT, a REIT sponsored by Mitsui Fudosan and specialized in commercial properties, announced that they will acquire a commercial complex, located near JR Ikebukuro station, the second busiest railroad terminal in Tokyo. The purchase price is JPY 20.4 billion, and the seller is Mitsui Fudosan, the sponsor of the REIT. The REIT currently has AUM of JPY 266 billion with 28 properties, including this property.
The property, “Ikebukuro Square”, was developed by Mitsui Fudosan and was completed in December 2012. It has gross floor area of 11,957 sqm. The key tenant is Round One, who operates amusement and entertainment facilities such as bowling, billiard and Karaoke. This is their flagship store in Tokyo. Other tenants include American Eagle Outfitter, a casual clothing brand who operates 1,000 retail stores around the world. This one is their fourth store in Japan. The property is currently 100% occupied.
For further details, please see the following Frontier announcement:
IIF raises JPY9.6 billion by secondary offering, acquires 6 properties
Industrial and Infrastructure Fund (IIF), a J-REIT sponsored by UBS and Mitsubishi Corporation and specialized in industrial properties, announced that they will raise JPY 9.6 billion by secondary offering and will acquire 6 industrial properties. The fund currently has AUM of JPY 147 billion with 23 properties.
Of the six properties, three are logistics facilities, two located in Kansai metropolitan area and one in metropolitan Tokyo. Other two are data storage and IT solution facilities located in Kansai metropolitan area, and the other one is a science research center in metropolitan Tokyo. The science research center is a development project with tenant secured. The other five are existing facilities. The total purchase price, including development cost, will be approximately JPY 18 billion. Assumed NOI yield will be in the range of 6.7% to 8.5%. All the sellers of the six properties are third parties.
Japan Excellent REIT raised JPY 16.5 billion by secondary offering, acquires 4 office properties
Japan excellent REIT announced that they plan to raise JPY 16.5 billion by secondary offering and to acquire four office properties. Japan excellent REIT specializes in office properties and currently has AUM of JPY 217 billion with 24 properties. The main sponsor of the REIT is Nippon Steel Kowa Real Estate, one of the major real estate developers in Japan.
The total purchase price of 4 properties is approximately JPY 24 billion. The largest one, “Akasaka Intercity” is located in CBD, Tokyo, and the deal will be an additional acquisition of sectional ownership of the property. They will purchase at the price of JPY 10.3 billion with assumed NOI yield of 4.1%. The other three buildings are located in Tachikawa-city, suburban Tokyo, CBD Osaka and CBD Sapporo-city, respectively. The deal in Osaka is the acquisition of the land parcel under the existing building, and the other two deals are of the land and building.
Assumed NOI yields are 5.7% for Tachikawa property, 4.5% for Osaka land and 7.2% for Sapporo property, respectively. Among the four acquisitions, three are from the sponsor and the other related party, and another one is from the third party.
For further details, please see the following announcements:
Daiwa RE Asset Management set up private REIT for residential properties
Daiwa Real Estate Asset Management, a subsidiary of Daiwa Securities Group, announced that they established a private REIT, Daiwa Residential Private Investment, and will commence investment in residential properties in March next year. The initial assets under management will be JPY 25 billion, and they plan to grow AUM to JPY 200 billion in five years. Their investment target will be rental apartments for singles and small families located in metropolitan Tokyo where younger generation will flow in the coming decade. They expect income from such properties will be least volatile compared to other types of real estate investments.
Daiwa Real Estate believes that there will be a strong demand for such instruments from pension funds and regional financial institutions. Since the REIT is not listed, the value of the investment will not be affected by capital markets fluctuation. Although non-listed REITs are less liquid compared to listed ones, Daiwa believes they will be able to find buyers to accommodate investors looking for liquidity.
For further details, please see the following Daiwa announcement;
Daiwa Office REIT acquires an office building in Shinjuku
Daiwa Office REIT, a J-REIT associated with Daiwa Securities, announced that they acquired an office building in Shinjuku, Tokyo. The building, “Shinyon Curumu”, is located within 4 minutes walk from JR Shinjuku station, the busiest railroad station in Japan, and the second basement of the building is directly connected to subway stations. It is in the midst of one of the busiest business and shopping districts in Tokyo.
The building was built in January 2012, and has 11 floors above ground and 2 below with gross floor area of 9,235 sqm. The acquisition price is JPY 9.65 billion. Although current occupancy rate is only 52% because it is newly built, expected NOI and NOI yield is JPY 411 million and 4.3% assuming 96% occupancy rate. The names of the sellers are not disclosed.
For further details, please see the following announcement;
GOR acquired an interest in an office property of Mori Building
Global One Real Estate (GOR), a J-REIT, announced that they acquired trust beneficial interest in the “ARK Hills Sengokuyama Mori Tower”, a brand new 47-story large complex, comprising office, residential and retail spaces. The property was developed by Mori Building and completed in August 2012 with gross floor area of 140,667 sqm. It is located in the Tranomon-Roppongi District, one of the most prestigious business districts in CBD, Tokyo.
GOR’s interest is sectional ownership of two floors (39th and 40th floor) with subject floor area of 3,969 sqm. The purchase price is approximately JPY 8,433 million, and the seller is an SPC associated with Mori Building. The transaction incorporates a joint management arrangement among sectional owners (Mori building, Meiji Yasuda Life and GOR) of the floor areas from 32 to 47 floors. In this arrangement, revenue generated by the joint management space will be distributed on a pro rata basis to the sectional owners with the period of 10 years until November 2022. Initial expected NOI is JPY 342 million. Thus, initial NOI yield is approximately 4.1%.
For further details, please see the following GOR press release;
TSE approved listing of Daiwa House REIT
Daiwa House announced that Tokyo Stock Exchange (TSE) approved a listing of Daiwa House REIT. This is the third new listing of REIT at TSE this year. The REIT once planned to be listed in June 2008, but gave up the listing plan due to market deterioration at that time.
According to the listing plan this time, The REIT will acquire 19 industrial properties and 5 commercial properties for the aggregate purchase price of JPY 114.5 billion. They will make an initial public offering and plan to raise JPY 43 to 46 billion. They also plan to borrow JPY 61 billion from commercial banks.
For further information:
JRE raises fund by secondary offering and purchases two office buildings
Japan Real Estate (JRE) announced that they will raise up to JPY 33.5 billion by secondary offering and that they will acquire “Harumi Front”, an office building, in Tokyo bay area and “Higashi Nibancho Square”, an office building, in Sendai City. The price of Harumi Front is JPY 31.3 billion and that of Higashi Niban Square is JPY 9.95 billion, amounting to a total of JPY 41.25 billion. The seller of both properties is a SPC associated with Mitsubishi Estate, the sponsor of the REIT, and Kajima Corporation.
“Harumi Front”, an office building in Tokyo bay area, was built in February 2012, and has 17 floors above ground and one below with gross floor area of 45,459 sqm. It is currently 98.5% occupied by 5 tenants. Expected NOI is JPY 1.63 billion and NOI yield is 5.2%. “Higashi Nibancho Square”, an office building in Sendai-city, was built in July 2008, and has 14 floors above ground and one below with gross floor area of 27,680 sqm. It is currently 97% occupied by 17 tenants. Expected NOI is JPY 686 million and NOI yield is 6.9%.
For further details, JRE announcement:
Invincible acquired 24 residential properties
Invincible, a J-REIT associated with Fortress, announced that they have acquired 24 residential properties for the total purchase price of JPY 14 billion. The 24 properties are located in metropolitan Tokyo, Osaka and Nagoya. They are all residential, predominantly comprising of units with monthly rents less than JPY 100,000, tailored for individual dwelling rather than family dwelling.
One of the notable characteristics of the 24 properties is that the size of each property is relatively small, the acquisition prices ranging from JPY 300 million to JPY 1.6 billion. On an acquisition value basis, approximately 30% is in metropolitan Tokyo, 45% in metropolitan Osaka, and 25% in metropolitan Nagoya.
For further details:
BOJ further eases monetary condition
Bank of Japan announced that they will enhance monetary easing further. Specifically, they will increase the size of their fund for asset purchase, i.e. program for quantitative easing (QE), from JPY 70 trillion to JPY 80 trillion. At the same time, they will extend the timeline for deadline from mid-2013 to the end of 2013. They have so far utilized JPY 60 trillion under this asset purchase program.
At the press conference following announcement, Mr. Shirakawa, BOJ Governor, stated the implementation of enhanced measure is due to weakening outlook of Japanese economy, mainly derived from Overseas’ factors, e.g. weaker than expected US recovery, decelerating Chinese economy and uncertainty in Euro-zone. However, Mr. Shirakawa stressed BOJ’s resolution to get out of deflation even under these circumstances by further strengthen their ammunition for easing.
Japan Rental Housing acquired a residential property in Shinjuku
Japan Rental Housing, a J-REIT specialized in rental apartment properties, announced that they will acquire “Spacia Shinjuku”, a 92-units rental apartment building located in Shinjuku, one of the busiest business/shopping areas in Tokyo. The property is located in 5 minutes walk from a station of popular subway line and a walking distance from JR Shinjuku station, the most heavy traffic terminal station in Tokyo. Thus, the location is quite convenient for commuting anywhere in Tokyo. It is also close to several department stores and shopping area.
The property was built in February 2003, and has 14 floors above ground with gross floor area of 4,171 sqm. The first 2 floors are for retail shops and the remaining 12 floors are for residential units. The purchase price is JPY 2.525 billion. The current occupancy ratio is 87% and annual net operating income is JPY 153 million. Thus, current NOI yield is 6.1%. The seller is an SPC, believed to be an affiliate of a German open-end fund in liquidation, run by Morgan Stanley.
Japan Hotel REIT raises JPY 5 Billion, acquires two hotels, disposes one
Japan Hotel REIT announced that they will issue additional units by secondary offering and raise funds of approximately JPY 5 billion for further expanding hotel assets. This is the first public offering by REITs specialized in hotel investment since 2008 financial crisis. At the same time, they announced the acquisition of two hotels, Hotel Keihan Universal City and Hotel Sunroute Shinbashi, and the disposition of one hotel, Millenia Hotel Matsuyama.
Hotel Keihan Universal City is one of the four official hotels of the entertainment facility, Universal Studio Japan, and has 330 guest rooms. The acquisition price is JPY 6 billion. Hotel Sunroute Shinbashi is a business hotel with 220 guest rooms and located near JR Shinbashi station, one of major terminal station in CBD, Tokyo. The acquisition price is JPY 4.8 billion. The seller of both hotels is Hulic, a Japanese developer.
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%.
J-REITs actively invest in Tohoku, YTD amount to be over JPY 10 billion
Nikkei newspaper reported that J-REITs have been actively investing in the earthquake- and tsunami-hit Tohoku region. J-REITs’ acquisition amounted to JPY 11.4 billion in the first 7 months of 2012. The amount was the highest in the past 5 years. Residential properties attract J-REITs investment. Corporations are expanding man power due to reconstruction work in the region. Thus, rent demand in the region has been burgeoning.
This year’s YTD acquisition amount was 80% larger compared with that in 2010. The whole year amount may surpass JPY18.9 billion, the 2007 historical high number.
The J-REITs investment was mostly concentrated in Sendai-city, the largest city in the region where many corporations hold regional headquarters, expanding headcount.
Government allows J-REITs to invest in Overseas Properties
Nikkei Newspaper reported that Japanese Government will allow J-REITs to invest in overseas properties. The intention is to enhance further the attraction of J-REITs by expanding their investment scope into fast-growing Asian real estate market. The Government also believes that this will help Japanese companies for financing their business expansion in the Asia.
J-REITs market has been stagnating since 2007, when their total market cap of J-REITs was almost JPY 7 trillion. It is currently only JPY 3.5 trillion. Japanese Government intends to snatch shares in Asian growth by de-regulation. They intend to submit a revision on Investment Trust & Company Law to the Congress in early 2013. They also believe that international diversification of J-REITs’ underlying assets will improve their risk/return profile, and could attract foreign investors in J-REITs.
The Government also believes that the de-regulation will help Japanese retail, warehouse and transportation companies who rapidly expand their business in Asia. These companies need physical assets, such as shopping centers and warehouse facilities for their business. The de-regulation could alleviate their financing requirement because J-REITs will be able to purchase these properties.
Goldman Sachs and Mitsubishi set up private REIT for pension funds
Nikkei Newspaper reported that Goldman Sachs Asset Management and Mitsubishi Corporation Group will start managing privately placed REIT primarily for pension funds.
Goldman Sachs plans to commence private REIT this summer, targeting JPY 30 billion as its initial asset under management. They plan to invest in office and residential properties in Tokyo, and to expand its asset size eventually to JPY 300 billion in 5 to 6 years. The target customers are pension funds and financial institutions.
Diamond Realty Management, an affiliate of Mitsubishi Corporation, plans to launch private REIT this autumn. They plan to have JPY 33 billion as its initial asset under management. They try to raise at least 30% of the initial equity from pension funds.
An existing private REIT of Mitsubishi Estate Group plans to increase JPY 10 billion to its existing JPY 50 billion private REIT, by offering additional units to pension funds.
Several reasons trigger the interest of pension funds look in Private REIT. Firstly, volatility is much smaller, compared with listed REITs. Secondly, investment period is longer than that of other private funds and they target stable dividends during investment period. Most important is the consensus that the Japanese real estate market seems bottomed out and recovery is in scope.
JPR REIT to raise JPY 22billion and acquire office property in Fukuoka
JPR REIT announced that it plans to raise JPY 22 billion by secondary offering. This is the sixth secondary offering by J-REIT since beginning of this year.
The REIT also announced acquisition of an office building in Fukuoka-city, the largest city in Kyushu Island with a population of 1.6 million. The property, Yakuin Business Garden, was built in 2009, and has 14 floors above ground with gross floor area of 22,286 sqm. It is currently fully occupied by 18 tenants. The purchase price is JPY 11 billion, and assumed NOI is JPY 617 million with 97% occupancy rate. Thus, investment yield is 5.6%p.a. The seller is an SPC of Tokyo Tatemono, a developer and one of the sponsor companies of the REIT.
Further details of the property:
Mori Trust REIT purchased an office/commercial complex in Fukuoka
Mori Trust Sogo REIT announced its acquisition of an office/commercial complex located in Tenjin, Fukuoka-city at the price of JPY 6.94 billion from third party. Fukuoka-city and its surrounding area is the fifth largest metropolitan area in Japan with population of 1.6 million. Tenjin area is the largest commercial center in the city.
The property was built in 2008, and has 12 floors above ground and one below ground with gross floor area of 7,700sqm. Up to fifth floors are for commercial use and sixth to twelfth floors are for office use.
The property’s total rentable space is 5,996 sqm and is currently fully occupied by 14 tenants. The current property NOI is JPY 457 million with 100% occupancy. Thus, investment yield is 6.59% p.a.
Please see the REIT’s announcement for further details;
NBF purchased COMODIO Shiodome for JPY 28.8 billion
NBF, the largest REIT in Japan, announced its acquisition of COMODIO Shiodome, an office building in Shiodome area in CBD, Tokyo at the price of JPY 28.8 billion from a third party. The property was built in 2006, and has 9 floors above ground and one below ground with gross floor area of 28,796 sqm.
The property’s total rentable space is 20,538 sqm and is currently fully occupied by 11 tenants. NBF estimates the property NOI to be JPY 1,399 million, assuming 97% occupancy rate. Thus, investment yield is 4.86% p.a.
Shiodome area is by far the largest re-development project site in CBD Tokyo, utilizing a land parcel of Japan Railroad’s previous freight terminal. The building is located in “West Block” of the area, close to the stations of popular commuter lines.
Please see the following NBF announcement for further details;
Frontier REIT to raise JPY 20 billion and acquire SC in Kyoto
Frontier REIT Management, a wholly owned subsidiary of Mitsui Fudosan, announced secondary offering of Frontier REIT, targeting to raise JPY 20 billion.
Since the beginning of 2012, J-REITs have raised JPY 95 billion new capital. This will be the fifth fund-raising among existing J-REITs this year and the first one for REITs specialized in retail properties.
At the same time, Frontier also announced the acquisition of a shopping center located in northeast suburban Kyoto-city for the price of JPY 8.8 billion. The SC has total floor area of 46,750 sqm and 800 parking lots. Key tenant is Izumiya, one of the major supermarket operators in Japan.
For further details, please see the following news release;
Goldman forms private placement REIT of JPY 100 billion
According to Nikkei Real Estate Market Report, Goldman Sachs Asset Management will launch a privately placed REIT, targeting for pension fund investors. The Japanese asset management arm of Goldman Sachs expects to start fund’s operation this summer. They expect the initial asset size to be approximately 100 billion yen [$1.2 billion]. The REIT is an open-ended type, and expects to focus on office buildings.
Japan Real Estate REIT acquiring Ueno building for JPY 22 billion
Japan Real Estate Investment Corporation, a REIT sponsored by Mitsubishi Estate, announced that it will acquire Tix Tower Ueno, a mixed-use building near Ueno Station in metropolitan Tokyo. The property is being sold by Itochu Property Development, Tokyo Tatemono and a special purpose company of these two parties. The price is JPY 22 billion. The property was built in 2010 and has 18 stories above ground and one basement floor with 23,727 sqm of gross floor area.
For further details, please see the following news release of Japan real Estate;
New J-REIT of Tokyu Land ready for listing
Tokyu Land, the real estate developing arm of Tokyu Railroad, announced that it will incorporate 18 properties, including Tokyu Plaza Omotesando Harajuku, into Activia Properties REIT, that Tokyu Land sponsors. The total sale price of the properties is about JPY 170 billion. Tokyu Plaza Omotesando Harajuku, just opened on April 18 of this year and is located in one of the most prestigious upscale shopping district in central Tokyo. It has GFA of 11,852 sqm.
Tokyu Land also announced that listing of Activia Properties REIT was approved by Tokyo Stock Exchange, and it expects to be listed on June 13. The asset under management of the REIT, JPY 170 billion, is over 5 times larger than that of the most recently listed (in April) Kenedix Residential REIT. Originally Activia REIT announced that it plans to go public by the end of 2012.
For more details (website of Tokyu Land):
BOJ’s easing package includes additional REIT purchase
Bank of Japan (BOJ) announced additional monetary easing package since they announced de fact “inflation target” of one percent in the Mid-February. The announced package is essentially the augmentation of quantitative monetary ease, that BOJ expanded its fund to invest in financial instruments from JPY 65 trillion to JPY 70 trillion, and that time frame for investment was extended to mid 2013 from the end of 2012.
The BOJ package includes purchase of REIT and ETF, in that fund for REIT was expanded to JPY 120 billion from JPY 110 billion and fund for ETF to JPY 1,600 billion from JPY 1,200 billion. According to Nikkei article on April 28, room for additional purchase would be JPY 43.3 billion for REIT and JPY 640 billion for ETF. Market observers commented that JPY 43.3 billion for REIT corresponds to 4 times of average daily trading volume of REIT whereas JPY 640 billion for ETF is 50% of average daily trading volume of Tokyo Stock Exchange. Thus, they believe impact on REIT is much larger than that on stock market.
New REIT was listed, the first one in the past 4.5 years
On April 26, Kenedix Residential REIT was listed on the Tokyo Stock Exchange. This is the first J-REIT listing in the last 4.5 years since Industrial & Infrastructure Fund was listed in October 2007. This shows renewed investors’ interest in the real estate market in Japan as rents seem to be bottomed out after a long stagnation. Seed assets for the REIT comprise 18 residential properties and two leased-land assets spread across Japan’s major regional cities.
“Several new REITs will raise funds after five years of silence in the Japanese real estate markets, some of them will be newly listed in the exchange. IN Q 2, 2012 highest capital raising in a single quarter since 2008
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