Alpha Investment Partners, the Singapore-based fund management arm of Singapore-based property conglomerate Keppel Land, has sold the J6 Front office tower in Tokyo to Hamburg-based property firm Union Investment Real Estate GmbH for €127 million.
Alpha originally bought the eight-story, 53,000 square foot J6 in 2009, just one year after its completion. It was only 37 percent occupied at the time, despite being adjacent to two busy shopping streets in the city’s central Shibuya Ward. Since 2012, however, Alpha has kept the building fully let.
“This is a Grade A asset in a great location along Meiji-Dori,” Christina Tan, managing director at Alpha, told PERE. “This asset will continue to do well for its owner as many tenants like its prime location.”
The J6 sale marks the fifth asset sale for the firm’s $1.18 billion Alpha Asia Macro Trends Fund I out of 21 investments. The exit gives Alpha a more than 20 percent IRR and 2x equity multiple over its five-year investment period, and the firm has returned 61 percent of the fund’s capital back to investors at this point, Tan added.
Across Alpha’s five private property funds, the firm still has $800 million of assets in Japan, and is expecting to grow its portfolio, focusing especially on Tokyo. “Alpha remains positive on the Japanese market and will capitalize on the positive sentiments,” Tan said. “Japan is still providing a high positive carry yield as interest rates remain low.”
Last July, Alpha hauled $1.65 billion for AAMTF’s successor vehicle, AAMTF II, blasting through it original $1 billion target with help from both previous and new investors. That fund has already been more than one third invested.
Union purchased the building for its open-ended listed real estate fund UniImmo: Europa, which already has one office building in Tokyo. The €9.4 billion fund’s primary focus is on Europe, but 40 percent of its assets can be based overseas. Altogether, Union Investment now owns 13 properties in the Asia-Pacific worth a total of €850 million. The firm was advised on its purchase by its Japanese partner, Touchstone Securities.