Japan Prime Realty buys Tokyo office, retail assets for US$89m

Tokyo-listed Japan Prime Realty Investment Corporation (JPR) has bought an office building and a retail property in Tokyo from its parent company for a combined JPY 9.55bn (US$89m).

The real estate investment trust is managed Tokyo Realty Investment Management, a subsidiary of Japanese property group Tokyo Tatemono.

The J-REIT also announced the sale of its Tokyo Tatemono Kyobashi office building in the Japanese capital to the parent company for JPY 5.8bn.

KY Kojimachi Building
KY Kojimachi Building

The acquisition includes the KY Kojimachi Building in a central office district in Yotsuya/Kojimachi, offering 3,493 sq.m. of office lettable space, JPR said in an announcement.

The office is fully let to seven tenants and is located within walking distance of Yotsuya station, which is on the JR Chuo/Chuo-Sobu line, Tokyo Metro Marunouchi line/Namboku line.

The 1,989 sq.m. FUNDES Ueno retail property is fully-let with 10 tenants and is situated next to the Ueno station, which serves the Shinkansen line, several JR lines and Tokyo Metro subways.

The surrounding area is home to Euno Park, Euno Zoo and the Tokyo National Museum.

JPR acquired the KY Kojimachi Building for JPY 5.75bn and the FUNDES Ueno asset for JPY 3.8bn, reflecting net operating income yields of 3.8% and 4.1% respectively.

The Tokyo office market has a severe shortage of premium workspace, with the Grade A office space vacancy rate sitting at 1.87% at the end of 2018, according to advisor Cushman and Wakefield.

FUNDES Ueno
FUNDES Ueno

The deal follows Japanese developer Sekisui House disposal of two Tokyo offices to its Sekisui House REIT, as part of a portfolio deal worth JPY 70.14bn (US$641.8m), in May.

Invesco Office J-REIT also acquired two offices in Tokyo and Yokohama City from Godo Kaisha Wing Property for a combined JPY 8.14bn last month, while a joint-venture led by AXA Investment Managers – Real Assets snapped up an office development in the capital late last year.

Listed on the Tokyo stock exchange in 2002, JPR focuses on office real estate investments in Tokyo and owns 62 properties, as of end-2018.

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