CapitaLand Mall Asia to buy four properties in Japan

CapitaLand's acquisition of Seiyu & Sundrug mall (above) in Saitama Prefecture, north of Tokyo, will grow its retail footprint in Japan by about 25 per cent to over two million sq ft in gross floor area.
CapitaLand's acquisition of Seiyu & Sundrug mall (above) in Saitama Prefecture, north of Tokyo, will grow its retail footprint in Japan by about 25 per cent to over two million sq ft in gross floor area.PHOTO: CAPITALAND

Three office buildings and one retail property in Greater Tokyo Area will cost it $636m

CapitaLand Mall Asia will acquire a portfolio of four properties in Japan for about 51 billion yen (S$636.3 million).

The acquisition, which is expected to be completed in this quarter, will help strengthen its parent company CapitaLand's foothold in the Greater Tokyo Area, the developer said yesterday. It will also boost the group's total asset size in Japan to about $2.5 billion.

"This acquisition will contribute a net operating income of about $25 million per year,"said Mr Jason Leow, co-ordinating chief executive for Asia at CapitaLand.

The portfolio comprises the Kokugikan Front office block in Tokyo, two office buildings in Yokohama - Yokohama Blue Avenue and Sun Hamada - and the Seiyu & Sundrug mall in Saitama Prefecture, north of Tokyo.

CapitaLand said the acquisition - inclusive of transaction costs - will be financed by a combination of internal funds and borrowings.

Mr Leow noted that the population in the Greater Tokyo Area has been increasing, reaching about 38 million in 2015 - a trend that will likely continue, underpinning the area's economic development with an expanding workforce.

CapitaLand said it is confident the three office buildings it is acquiring will continue to garner stable recurring income as they are in areas with limited new supply.

Yokohama Blue Avenue has a gross floor area of about 555,000 sq ft, Sun Hamada has 132,000 sq ft and Kokugikan Front, 85,000 sq ft.

Mr Kek Chee How, country head, Japan at 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."

The Seiyu & Sundrug mall has a gross floor area of about 393,000 sq ft and is the largest suburban mall within a 3km radius, the company said.

The mall will enlarge CapitaLand's retail footprint in Japan by about 25 per cent to over two million sq ft in gross floor area.

The developer owns and manages four malls in Japan - Olinas Mall, Vivit Minami-Funabashi and La Park Mizue, all in Tokyo, and Coop Kobe Nishinomiya-Higashi, in Kobe.

A version of this article appeared in the print edition of The Straits Times on February 18, 2017, with the headline 'CapitaLand Mall Asia to buy four properties in Japan'. Print Edition | Subscribe