Wednesday, May 8, 2013

Tokyo 東京





















GIC sinks US$1.7b into Tokyo space









GIC is taking up the entire office component of Pacific Century Place Marunouchi, next to Tokyo Station
SINGAPORE sovereign wealth fund GIC is sinking what some have estimated to be in the region of US$1.7 billion (S$2.2 billion) into one of Tokyo's most prime office spaces.
The investment firm said it is taking up the entire office component of Pacific Century Place Marunouchi, located next to Tokyo Station and a stone's throw from the Ginza shopping district.
The office portion consists of the 8th to 31st floors of the building, and has a gross floor area of 38,840 sqm of net lettable area. The lower floors - not part of the transaction - are taken up by Four Seasons Hotel Tokyo and retail space.
SINGAPORE sovereign wealth fund GIC is sinking what some have estimated to be in the region of US$1.7 billion (S$2.2 billion) into one of Tokyo's most prime office spaces.
The investment firm said it is taking up the entire office component of Pacific Century Place Marunouchi, located next to Tokyo Station and a stone's throw from the Ginza shopping district.
The office portion consists of the 8th to 31st floors of the building, and has a gross floor area of 38,840 sqm of net lettable area. The lower floors - not part of the transaction - are taken up by Four Seasons Hotel Tokyo and retail space.
SINGAPORE sovereign wealth fund GIC is sinking what some have estimated to be in the region of US$1.7 billion (S$2.2 billion) into one of Tokyo's most prime office spaces.
The investment firm said it is taking up the entire office component of Pacific Century Place Marunouchi, located next to Tokyo Station and a stone's throw from the Ginza shopping district.
The office portion consists of the 8th to 31st floors of the building, and has a gross floor area of 38,840 sqm of net lettable area. The lower floors - not part of the transaction - are taken up by Four Seasons Hotel Tokyo and retail space.
GIC did not reveal how much it paid for the office block; but Reuters reported on Aug 25 that Secured Capital Investment Management Co, which GIC said it bought the property from, was putting it up for sale at more than US$1.7 billion.
Secured Capital - part of Asian private equity firm PAG - bought the property in 2009 for about 144 billion yen (US$1.4 billion). Reuters quoted unnamed sources close to the deal saying that Secured Capital was seeking more than 180 billion yen (US$1.7 billion) in its sale of the property.
At that price, Reuters' sources said, the expected annual return for GIC from the Grade A office space would be about 3 per cent.
"As a long-term value investor, GIC believes Pacific Century Place Marunouchi gives us a combination of stable income and the potential for capital appreciation over the long term," said Lee Kok Sun, co-head of Asia, GIC Real Estate.
Pacific Century Place Marunouchi is located in Tokyo's Chiyoda ward, which has some of the country's highest rents and lowest vacancy rates. Most of the other properties in the area are owned by Mitsubishi Estate Co, Japan's leading developer.
Property analysts have a positive view of the Tokyo office market in the near term.
JLL (Jones Lang Lasalle) said in its second quarter 2014 Asia Pacific Property Digest that it expects rents in Tokyo "to rise gradually over the remainder of (2014)". It also said that strong interest from investors and expectations for further rental increases should drive capital values higher. Meanwhile, CBRE Research said in its Q2 2104 global office rent cycle report that rents in Tokyo are on an uptrend.
Mr Lee added: "The attractions of the property are its prime location, superior building quality, and quality tenants. This investment demonstrates our confidence in Japan and, specifically, the Tokyo office market over the long run."
Pacific Century Place Marunouchi counts among its tenants Shell Japan, BHP Billiton Japan, Deloitte Touche Tohmatsu and Verizon Japan.
The Business Times understands that the current vacancy rate for the building is in the low single-digit range. JLL's report said that the overall vacancy rate for Tokyo's office space was "stable at 3.7 per cent" in Q2 2014.
Pacific Century Place Marunouchi was built by Hong Kong tycoon Richard Li's Pacific Century Group and completed in 2001. The group then sold it for 200 billion yen in 2006 to KK daVinci Holdings, a Japan-based company primarily engaged in the property investment advisory business. KK daVinci then sold it to Secured Capital.
Reuters had also reported in August that Goldman Sachs Asset Management was a final bidder for Pacific Century Place Marunouchi, with a possible offer of some 165 billion yen, competing against at least two other unnamed investors.
GIC's first investment in Japan dates back to 1997. Earlier this year, it was looking to buy Meguro Gajoen, a complex of office properties and retail facilities in Tokyo, but backed off from the deal due to a legal dispute.  - 2014 October 21  BUSINESS TIMES
PUBLISHED SEPTEMBER 04, 2014

Tokyo property investments surge on rising rents

Prime office rents expected to rise by about 30% over the next 3 years








Big acquisition: Mori Trust, Japan's second-biggest closely held developer by sales, said on Aug 29 that it acquired the 37,000 sq m Meguro Gajoen in central Tokyo, known for its gardens and as a favoured wedding location. 

Investment in Tokyo properties is surging on prospects that rents will rise, boosting returns, even after a 20 per cent gain in prices since Japanese Prime Minister Shinzo Abe took office almost two years ago.
"There is a sense of value here that you don't find in other major office markets," said Jon Tanaka, Tokyo-based managing director of Angelo Gordon & Co, an alternative asset manager with about US$27 billion in assets.
"Japanese and offshore core buyers have capital available and they are very eager to find investment opportunities in Tokyo," he added.
Real estate investment in Japan rose 70 per cent to 4.6 trillion yen (S$54.9 billion), the highest level since March 2008, in the 12 months ended in March from a year earlier, according to a report published in July by Deutsche Asset & Wealth Management.
PUBLISHED APRIL 10, 2014

GIC to buy Tokyo property for 134b yen


 [TOKYO] Singapore state investment firm GIC Pte Ltd will buy a Tokyo property from US investment fund Lone Star Funds for some 134 billion yen (S$1.6 billion), the highest price since Japan's real estate market recovery accelerated last year, three people with direct knowledge of the sale told Reuters.
Lone Star had put up the property, called Meguro Gajoen, for auction late last year for at least 96 billion yen. The property comprises a complex of office towers, with the Japanese unit of Amazon.com Inc its main tenant.
GIC was chosen from three final bidders, which included a consortium of New York-based real estate investment firm Aetos Capital Real Estate LP and China's sovereign fund China Investment Corp, two of the people said.
A GIC spokeswoman in Singapore declined to comment. Lone Star officials were also not immediately available to comment.

WEALTH

Japan targets its expat tax-dodgers with ‘big apartments and yachts’ in Hong Kong

The Japanese government is planning to target the assets of expatriate citizens squirrelling wealth abroad - their "big apartments and yachts in Hong Kong", as one expert put it - as they endeavour to avoid taxes at home.  --2014 Nov 11   SOUTH CHINA MORNING POST

Japanese Pension Funds Move Slowly Into Real Estate

Some of Japan's pension funds are moving into the country's newly hot real-estate market in search of higher profits.

The moves are small and lag behind more significant investments by foreign pension funds. But they are an important change in the ultraconservative stance of Japanese institutional investors, which control a total of $3.7 trillion, the world's second-largest pool of retirement funds after the U.S., according to consultancy Towers Watson & Co.

Japanese pensions have shied away from property and stocked up on domestic bonds since the 1990s, after land prices plummeted in the wake of a financial crisis. Property prices have declined nationwide for 20 of the past 22 years, putting investment portfolios underwater and saddling many companies with bad debt.



This year, though, Japan's real estate is on track for its best year since the 2008 financial crisis, as a brighter economic outlook and flow of easy money from the central bank drives cash into shopping centers, warehouses and office buildings. The volume of commercial-real-estate transactions for the first nine months of the year climbed to ¥2.84 trillion ($27.55 billion), 43% higher than all the transactions for 2012, according to Jones Lang LaSalle Inc. The return on Japanese property during the year through May hit 4.5%, while the return on Japan's benchmark 10-year government bond is at around 0.67%.


Overall, 43% of Japanese pension funds now have some real-estate exposure, up from 31% in 2009, according to Japan's Association for Real Estate Securitization. Pension funds now account for 14% of the ¥10 trillion-plus in private-real-estate funds, up from 4.8% in 2006, according to another ARES survey.


 At property-fund manager Diamond Realty Management Inc., Chief Executive Takashi Tsuji said he has seen increasing interest from pensions in a new fund started last year and estimates the percentage of such investors in the fund could rise to one-third from a quarter in the next few years. The total value of the fund's investments is expected to double to ¥100 billion by the end of December.


 Tsuneo Taguchi, who oversees travel firm JTB Corp.'s ¥120 billion pension fund, said he decided to put money in property funds for the first time this year because he needed to boost returns. For pensioners, he added, investments in physical properties were relatively "easy to understand.''


 Mr. Taguchi doubled the fund's allocation to nonstock and bond assets to 20% from April and put roughly a third of that into private real-estate funds.


 Such tentative moves could get bolder if the ¥120 trillion Government Pension Investment Fund—the world's biggest pool of public-pension assets—starts investing in real estate, as a government-appointed panel recommended last month. In recent months, GPIF officials have toured a warehouse with an eye toward future investment, people familiar with GPIF's plans said.


 GPIF participation in the market "will put the stamp of approval on real-estate investment,'' said Ari Druker, head of corporate finance, north Asia, at real-estate-service provider Jones Lang LaSalle KK.


 While any GPIF shift is still likely a few years away, it is clear Japanese pension funds have to invest in a broader range of assets to lift returns.


 Most corporate funds hold the bulk of their assets in bonds—-some 44%— and have very little in so-called alternative assets, with roughly 1% in real estate, according to Japan's Pension Fund Association.


 In the U.S., in contrast, pension funds on average invest 5.2% of their portfolios in real estate, according to London-based researcher Preqin. Japanese pension funds are still "batting below their weight," in real estate, said Mr. Druker.


The ultraconservative investment strategy has led Japanese public and private pension funds to earn less than their peers in other countries for six out of the 10 years ended in 2012, the most recent year available, according to the Organization for Economic Cooperation and Development. The situation is worsening due to mounting payouts as the population ages and bond yields approach all-time lows.


 Foreign pension funds have been quick to jump on this year's Japanese real-estate rebound. In February, Canada's biggest pension-fund manager, the Canada Pension Plan Investment Board, said it would commit an additional $316 million to a $500 million joint venture it started in 2011 with Singapore-listed Global Logistic Properties Ltd. In May, the Canadian pension board closed a more than $400 million co-investment deal for office buildings in Tokyo.

APG, the Netherlands's largest pension manager, with €337 billion ($462.23 billion) in assets under management, led a small group of investors to close a ¥40.8 billion deal for Japanese distribution centers—huge warehouses that also operate as shipment hubs—in July.

Still, many Japanese pension-fund managers are like auto-parts maker Denso Corp., which won't touch real estate for its ¥400 billion fund. Investment group manager Kengo Torii said that even though Denso's fund likely will expand its 5% allocation to nonstock, nonbond holdings like private equity when it reshuffles its portfolio in 2016, "real estate would be difficult" because of the potential impact of a large loss.

Ichiro Tajima, who manages drug maker Astellas Pharma Inc.'s ¥97 billion pension, which has 2% of its assets in real-estate funds, said that many Japanese pensions also are hampered by lack of experience in the sector, compared with global peers. "Funds don't have the know-how to directly buy properties," he said. "But overseas funds are buying lots."   -- 2013 Dec 10    Wall St. Journal
http://www.businesstimes.com.sg/specials/property/softbank-founder-acquires-tiffany-building-32b-yen-20131003
PUBLISHED NOVEMBER 28, 2013

Tokyo property boom lifts bond sales by Reits

[TOKYO] The strongest bond sales in three years by real estate investment trusts are showing confidence in the property revival sparked by Prime Minister Shinzo Abe.

Reit sales jumped 33 per cent this year to 95.8 billion yen (S$1.2 billion), outpacing the 5.9 per cent increase in Japanese corporate issuance and the 2.2 per cent climb for that in the US, according to data compiled by Bloomberg.

Japan Excellent Inc, whose properties house units of Toshiba Corp and Fujitsu Ltd, raised five billion yen of 0.46 per cent debt last week due 2018 at a five basis point yield premium over the yen swap rate, down from the 48 it paid in 2011.

Tokyo beat Paris to become the world's third most-active real estate market this year, as office vacancy rates fell to a 2009 low and housing starts extended the longest growth streak in more than 19 years ahead of a planned consumption tax increase. The Japanese capital's properties also stand to receive a windfall of about 152 billion yen from the 2020 Olympic Games, according to International Olympic Committee.



Whole City Block in Tokyo - Edo period?

A photo posted by Stan Yee (@stanyee) on





2014 February 15
TOKYO -- Bain Capital reckons Japan's hot spring industry is poised for foreign-tourist-driven growth, says managing director Yuji Sugimoto, and the U.S. private-equity firm is wading in with a big acquisition.
      Bain said Friday it will buy Oedo-Onsen Holdings for about 50 billion yen ($421 million), including debt, with an eye to eventually listing the company. Oedo-Onsen's revenue is expected to grow 10% to 35.3 billion yen in the year ending Feb. 28.
     Bain will buy all of the company's stock from its president, Hiroshi Hashimoto, and his family next month.
     The company operates 29 hot spring hotels and bathhouse complexes in Japan. Its Oedo-Onsen Monogatari resort in Tokyo hearkens back to feudal days, when the capital was called Edo. Located in Odaiba, a powerful magnet for tourists, it is welcoming growing numbers of Taiwanese, Koreans and other Asian travelers, according to Sugimoto. Around a fifth of overnight guests are foreigners.
     But Oedo-Onsen needs to do more to promote itself overseas, Sugimoto says. Bain will see to making the company's website available in more foreign languages than just English and Chinese, improve its online reservation system, and list its resorts in foreign travel guides.
     Bain is no stranger to turning around chain operators, such as Japanese restaurant group Skylark, which it bought in 2011 and took public again last year. With its latest acquisition, the private-equity firm is looking to extend Oedo-Onsen's reach to the southern Japanese island of Kyushu by buying existing hotels in Beppu and other areas famous for hot springs. It is also aiming for economies of scale in procurement.



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