Daiwa House REIT offloads Japanese warehouses for US$111m

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Tokyo-listed Daiwa House REIT Investment Corporation has disposed of six logistics properties across Japan for JPY11.7bn (US$110.6m) to improve the quality of its diversified portfolio.

DHR, which will have JPY739bn in assets under management post-transaction, sold the assets to Godo Kaisha Heptagon, a Tokyo-based entity unrelated to DHR. The sale is expected to generate a combined gain of JPY461m.

The assets include the D Project Shin-Misato, D Project Gifu, D Project Sapporo Minami, D Project Sendai Minami, D Project Gotenba and the D Project Nishi-Hiroshima assets, according to a statement.

The REIT said it was selling the assets to improve its portfolio quality and promote efficiency in its portfolio management.

DHR noted that the properties were considered at risk of lower net operating incomes in the future due to rent reductions and increased repair and maintenance expenses, or were less efficient due to their small size.

Located in Misato in the Greater Tokyo Area, the fully-let D Project Shin-Misato is the largest asset with 11,289 sq.m. of lettable area and will fetch JPY5.8bn from the sale.

The 7,669 sq.m. D Project Gifu is situated in the city of Gifu near Nagoya and the 6,749 sq.m. D Project Sapporo Minami is located in the city of Kitahiroshima in Hokkaido.

The other assets are located in Miyagi, Shizuoka and Hiroshima.

DHR invests in logistics, residential, retail and hotel properties and focuses on the Greater Tokyo area, the Greater Nagoya area and the Greater Osaka area.

The REIT is part of Daiwa House Group, one of Japan’s largest homebuilders.