Notable real estate transactions in October and November 2016

Starts Proceed Investment bought 15 residential properties for JPY24 billion (OrangeTee 7 Nov 2016)

Starts Proceed Investment Corporation bought 15 residential buildings for approx. JPY24 billion from a company related to its sponsor. The largest property in the portfolio is Proceed Shin-Yokohama, a 11-storey building with basement located 7-minute walk from Shin-Yokohama Station. It was transacted at JPY4.33 billion, which translated to a NOI yield of around 5%. Other properties in the portfolio are located in Tokyo, Chiba, Nagoya, Osaka, Sendai and Kobe, with NOI yields range from 4.5% to 6.1%.

Gaw Capital sold Osaka luxury hotel for JPY16 billion (PERE 3 Nov 2016)

Gaw Capital Partners sold the Hyatt Regency hotel in Osaka to Hoshino Resort REIT for JPY16 billion, which reflected a net yield of around 6.2%. Gaw Capital has transformed a loss-making hotel into a profitable property thanks to the restructuring of the hotel operation and the rapid growth of foreign tourists in Japan. Gaw Capital will continue fund-raising activities for their fifth Pan-Asia opportunistic real estate fund, which has achieved around 70% of the equity target.

Hyatt Regency Osaka Hotel

Kenedix acquired an office property in Toranomon for JPY8.4 billion (Kenedix Office Investment Corp 1 Nov 2016)

In a move to optimize the portfolio, Kenedix Office Investment Corp sold an office building in Nihombashi for JPY12.4 billion, and bought another office property in Tonanomon area for JPY8.4 billion. The newly acquired property is Nishi-Shinbashi TS Building, a 11-storey development located in the prime area near to Toranomon Station. The property has 100% occupancy rate and estimated NOI yield of around 3.9%.

CDL to take 20% stake in prime Tokyo residence (Business Times 19 Oct 2016)

CDL plans to buy a 20% stake in Park Court Aoyama The Tower, a 163-apartment development in Tokyo for an undisclosed amount. Park Court Aoyama was developed by Mitsui Fudosan Residential Co with a total gross development value of more than JPY50 billion. Apartment sizes range from 389 to 3,789 sq ft, with price for the initial 55 units start from JPY178.8 million for a one-bedroom apartment to JPY271 million for a three-bedroom apartment. According to Mr Sherman Kwek, CDL’s deputy chief executive officer, this investment is a rare opportunity to participate in a prime freehold residential development project in Tokyo central five wards. It is also in line with CDL’s diversification strategy to accelerate overseas expansion.

Park Court Aoyama The Tower

Heiwa Real Estate REIT acquired an office building for JPY3.25 billion (Heiwa REIT 17 Oct 2016)

Heiwa Real Estate REIT purchased Across Shinkawa Building, an office property with residential component, for JPY3.25 billion from its sponsor. The rationale of the transaction was to improve the quality of the overall portfolio over the medium to long term and to enhance earnings momentum. The property has occupancy rate of 97.6% and estimated NOI yield of around 5%.

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