Aviva Investors and Secured Capital acquire Glass City Shibuya
The Tokyo Recovery Fund, established by Aviva Investors and Secured Capital Investment Management, has purchased Glass City Shibuya in Tokyo, Japan.
This is the fund’s second acquisition since acquiring Meguro Place in March 2012 and achieving its second close in July 2012, bringing the fund to a total of USD212m.
Glass City Shibuya is an 11-storey modern building completed in February 2004 comprised of 11 floors of offices and 37 basement parking spaces. The property is multi-let to 11 diversified tenants, predominantly companies in the IT and apparel sectors, and is currently fully occupied.
Glass City Shibuya is located in Shibuya, one of the key hub stations in central Tokyo which is served by three major railways and two subway lines.
Shu Watanabe, deputy fund manager of the fund, says: “This asset is representative of the type of quality, well-located office real estate that the Tokyo Recovery Fund aims to acquire. The property is located in one of Tokyo's central wards and is in line with the fund’s strategy to deliver stabilised distribution yield with upside in capital value, which is further enhanced by the favourable debt financing available in the market. This second acquisition marks a significant milestone for the fund which is expected to raise further equity from other institutional investors as it targets an aggregate portfolio of over USD500m, based on a target equity raise of USD250m and 50 per cent gearing.”
Naoya Nakata, managing director at Secured Capital, says: “The opportunity to acquire a quality asset like Glass City Shibuya at attractive terms further validates our belief that there are significant gains to be made from investments in quality office buildings in Tokyo’s central wards. Japan’s commercial property sector remains under-valued and our unique on-the-ground expertise means we are well placed to continue to source similar quality opportunities that will generate positive returns for investors.”
The fund, which was established by Aviva Investors’ Singapore-based Asia Pacific real estate team and Secured Capital, an expert in Japanese real estate, is managed by Ian Hally with Secured Capital acting as the asset manager. The fund’s core-plus investment strategy aims to take advantage of the constrained capital markets by acquiring a portfolio of good quality office real estate in prime locations in central Tokyo, Japan.