The following is a presentation of the ten major real estate transactions based on price reported in 2011 by Nikkei Real Estate Market Report. Between February and March, the market was excited by transactions such as Mitsubishi Heavy Industries Building, Kokusai Shin-Akasaka Building and Promise Headquarters Building.
Although the market was temporarily stagnant in the middle of the year due to the impact of the Great East Japan Earthquake, both the number and scale of transactions are showing signs of recovery as the year’s end nears. The bulk acquisition of 15 logistics facility properties, acquired by Singapore’s GLP, was the only transaction of the year to have a scale of 100 billion yen [$1.2 billion]. At the end of the year, the buy back of Yebisu Garden Place ownership by Sapporo Holdings was also announced.
Singapore’s Global Logistic Properties (GLP), in an equal investment with governmental fund China Investment Corporation (CIC), will acquire a Japanese logistics facility portfolio from LaSalle Investment Management of the U.S. The transaction targets 15 properties centered on the greater Tokyo area and including such locations as Nagoya, Osaka, Kobe and Hiroshima. They are major properties from "Japan Logistics Fund I," established by LaSalle in 2004, with an aggregate gross floor area of 770,000 m2. The acquisition price is 122.6 billion yen [$1.6 billion]. Domestically, the acquisition may be the largest real estate transaction in 2011.
Mitsubishi Estate acquired the Kokusai Shin-Akasaka Building in Akasaka, Minato-ku, Tokyo. The company also owns a hotel adjacent to the East Building of the office complex, making the total land area of these properties 14,308 m2. The seller is a special purpose company formed by the Lone Star Group. Trading company Sojitz currently has its head office in both the East and the West Buildings, and will relocate to the Iino Building in Uchisaiwaicho, Chiyoda-ku.
Mitsui Fudosan and Mitsui & Co. will acquire the Promise Headquarters Building (the Otemachi PAL Building) in Otemachi, Chiyoda-ku, Tokyo. The seller is major consumer financing company Promise and the price is 72.03 billion yen [$850 million]. Each of the buyers will obtain 50% joint ownership in the building.
REIT Japan Real Estate (JRE) will incorporate the Akasaka Park Building in Akasaka, Minato-ku, Tokyo in its assets for 60.8 billion yen [$750 million]. The seller is Mitsubishi Estate, the REIT’s sponsor. Following the acquisition, the REIT will have an acquisition price-based AUM of 718.66 billion yen [$8.9 billion].
Mitsubishi Heavy Industries (MHI) announced it will dispose of its headquarters building, the Mitsubishi Heavy Industries Building, in Konan, Minato-ku, Tokyo. The buyers are REIT Nippon Building Fund and a domestic institutional investor. The total sale price amounts to 60.5 billion yen [$710 million]. MHI will lease and continue to use the building after the sale.
The Tokyo Metropolitan Government announced that it will purchase 105,193 m2 of land for part of the site for the new Toyosu fish market. The relocation of the market from Tsukiji is targeted for 2014. The sellers are Tokyo Gas and Tokyo Gas Toyosu Development, a subsidiary of Tokyo Gas. The price is 55.9 billion yen [$650 million].
Ship builder and heavy equipment manufacturer IHI will buy back the Toyosu Center Building in Toyosu, Koto-ku, Tokyo for 40.8 billion yen [$480 million]. The seller is YK TCB Funding, a special purpose company that is financed by IHI. IHI sold the property to the SPC for approximately 30 billion yen [$350 million] in order to balance-off its assets in March 2004.
Yebisu Garden Place (YGP), a subsidiary of major brewer Sapporo Holdings, entered into negotiations with a fund of Morgan Stanley to acquire its 15% joint ownership and become the exclusive owner of the mixed-use complex Yebisu Garden Place in Shibuya-ku, Tokyo.The expected acquisition price was announced to be 40.5 billion yen [$500 million].
Mori Hills REIT (MHR) acquired additional parts of Roppongi Hills Mori Tower and the Ark Mori Building. The seller was Mori Building, which sponsors the REIT. The total acquisition price is approximately 35.9 billion yen [$440 million]. At the same time, the REIT sold Roppongi Hills Gate Tower to Mori Building for about 35.9 billion yen. MHR reshuffled its holdings based on its basic policy to sell properties with a low cap rate and acquire ones with a high cap rate.
Hulic acquired Yodobashi Camera Multimedia Kichijoji, a retail building in Kichijoji-Honcho, Musashino City, Tokyo. The price is believed to be slightly less than 30 billion yen [$360 million]. The seller was F4O17 TMK, a special purpose company belonging to the Lone Star Group. Hulic will sell the property to investors as early as this year.
All above information is as of December 28, 2011. Only the cases with prices are known. The transaction price for Kokusai Shin-Akasaka Building is based on a newspaper report, and includes adjacent land. The transaction contract for Yebisu Garden Place is planned for late January 2012, and the price is subject to change.