SINGAPORE - CapitaLand, through its wholly owned shopping mall business CapitaLand Mall Asia, has entered into conditional sale and purchase agreements to acquire a portfolio of four office and retail properties in Japan's Greater Tokyo Area, for 49.7 billion yen (S$620.1 million).
CapitaLand said the acquisition will strengthen its foothold in Greater Tokyo, the world's most populous metropolis, and increase the group's total asset size in Japan to about S$2.5 billion.
The portfolio comprises two office buildings in Yokohama, Yokohama Blue Avenue and Sun Hamada; one office building in Tokyo, the Kokugikan Front; and, one shopping mall in Saitama, the Seiyu & Sundrug.
Including transaction costs, the total investment for the portfolio is about 51 billion yen (S$636.3 million).
Mr Jason Leow, CEO of CapitaLand Mall Asia and CapitaLand's co-ordinating CEO, Asia, said the latest acquisition will deepen the group's presence in Greater Tokyo through assets with stable yields and recurring cash flow.
"Immediately accretive with upside potential, this acquisition will contribute a net operating income of about S$25 million per year, providing CapitaLand with a stable source of income as we continue to expand our business," he said.
He added: "With a sizeable amount of assets under management, this enlarged portfolio in Greater Tokyo will also advance a long-term business strategy for the Group's operations in Japan."
Mr Kek Chee How, country head, Japan, CapitaLand Mall Asia, said the long-term forecast of Greater Tokyo's office market remains positive, with vacancies in central Tokyo expected to stay below 5 per cent through to 2025.
"As the three office buildings we are acquiring
are stabilised assets located in areas with limited new supply, we are confident they will continue to generate stable recurring income," he said.
He added that the Seiyu & Sundrug, with its gross floor area (GFA) of close to 400,000 square feet, will grow CapitaLand's retail footprint in Japan by about 25 per cent to over 2 million sqft in GFA.
The acquisition will be financed by a combination of internal funds and borrowings, and is expected to be completed in the first quarter of this year
CapitaLand currently owns and manages four shopping malls in Japan - namely Olinas Mall, Vivit Minami-Funabashi and La Park Mizue in Tokyo; as well as Coop Kobe Nishinomiya-Higashi in Kobe.
Through its wholly owned serviced residence arm, The Ascott Ltd, CapitaLand owns and manages 46 properties with more than 3,500 apartment units in Japan.
The group's Japan portfolio also includes a 20 per cent stake in an office building - the Shinjuku Front Tower.