AXA Real Estate Investment, announced that the Tokyo Office Property Fund has completed the acquisition of Kojimachi, a high quality 2,565 m² office building situated in central Tokyo’s Chiyoda district, and Harajuku, a prime 3,486 m² office building located in the Shibuya district of central Tokyo for a total consideration of €36 million (¥5.1 billion). These acquisitions are co-investments between TOP and Tokyo Office Real Estate Investment Fund (“TOREIF”), a fund managed by Sumitomo Mitsui Trust Real Estate Investment Management Co. Ltd. Both funds were launched in August 2012.
On completion of these transactions, the Fund is now 80% invested and its total assets under management has increased to over €106 million2 (¥15 billion).
Kojimachi is an eight storey office building situated in Chiyoda ward, a central district in Tokyo. It is ideally located in front of a subway station and is surrounded by quasi-government offices and foreign embassies, including the National Diet and the Supreme Court of Japan. The property has a number of longstanding tenants, including the post office that occupies the ground floor, and has maintained over 90% occupancy since the beginning of the financial crisis as result of its convenient location.
The Harajuku building is situated in Harajuku, Tokyo’s popular fashion district. The eight storey building is fully let to one of Japan’s leading ladies fashion retailers, that has just renewed a seven year fixed lease. The property is well positioned to continue to benefit from its position in what has become a hub for fashion retail tenants.
Both assets are in line with the Fund’s stated strategy to invest in well-maintained mid-sized core Tokyo office properties, located in Tokyo’s five central wards (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) and four adjacent wards (Shinagawa, Koto, Bunkyo and Toshima).
AXA Real Estate considers Tokyo’s mid-size markets for the Fund’s investments due to these sub-markets attracting a wide range of tenants and the limited supply of new office buildings, in the short to medium term in these markets, facilitates the potential for significant rental growth.
Hidetoshi Ono, Head of Japan Core Fund at AXA Real Estate, commented: “The acquisition of these two properties is demonstrative of our ongoing ability to acquire well-located, well-let assets in our target districts of Tokyo, at an opportune time in the market cycle. Whilst we have already invested 80% of the capital, we will continue to build upon our track record of delivering the highest levels of performance and value, as we look to invest the remaining equity.”
Source: AXA Real Estate