Mapletree trust buys Tokyo offices for US$355m amid Hong Kong mall closure

Singapore-listed Mapletree North Asia Commercial Trust has agreed to buy two office towers in the Greater Tokyo area for S$482.5m (US$354.7m), as the trust dilutes its exposure to its shuttered Festival Walk mall in Hong Kong.

mBay Point Makuhari building
mBay Point Makuhari building

The trust acquired the assets at a net property income yield of 4.5% from its sponsor, Mapletree Investments, after the seven-storey Festival Walk mall was extensively damaged during the Hong Kong protests.

The real estate asset manager closed the 112,297 sq.m. mall on November 13 and plans to reopen it in the first quarter of 2020, while the adjoining office building reopened on November 25.

“The proposed acquisition of the two office towers in Greater Tokyo will contribute to the diversification of MNACT and at the same time, reduce the income and asset concentration of Festival Walk,” said Cindy Chow, CEO of the trust’s manager.

The transaction includes the fully-let Omori Prime building in Tokyo’s Shinagawa ward, offering 6,798 sq.m. of net lettable area across 13 floors.

The 26-storey mBay Point Makuhari building is located in Chiba City, with 84,785 sq.m. of NLA and an 84.8% occupancy rate.

“The properties in Japan are freehold, and provide a relatively higher yield spread against the local cost of funds compared to the Greater China market,” Chow said.

“Well-located in attractive office hubs in the Greater Tokyo area and with convenient access to public transport nodes, the properties have good specifications and are cost-efficient locations for tenants.”

Omori Prime building
Omori Prime building

The Omori property is located near the trust’s existing Higashinihonbashi 1-chome, TS Ikebukuro and IXINAL Monzen-nakacho buildings within the Tokyo 23 wards area.

The mBay asset is situated within the same Makuhari business area as its SII Makuhari and Fujitsu Makuhari buildings.

Together, the newly acquired properties have 53 tenants and a combined weighted average lease expiry of 3.4 years.

Mapletree is a real estate investment manager with S$55.7bn in assets under management.

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