Bids due next week on ¥200bn ex-daVinci asset

The most expensive single asset bought by Tokyo-based private equity real estate firm KK daVinci, has been placed on the market after Shinsei Bank, the senior lender behind the deal, appointed Mizuho Trust to market its sale.

According to a 13-page sales document circulated to prospective buyers by Mizohu, first bids for the 418,000 square foot Pacific Century Place (PCP) office in Tokyo’s upmarket Maranouchi district, are expected next Friday and the chosen buyer is expected to be picked by 25 December. Shinsei Bank hopes to complete a sale in January.

Following visits to potential buyers by the selling party at the end of October, all those confirming they would be interested in bidding on the office, received the sales documents. According to one source involved in the process there were 49 bids from investors both in Japan and from overseas.

No sales price has been formally communicated, but the source said that bids are unlikely to be more than ¥150 billion ($1.66 billion).

He added that lenders, particularly Japanese banks, had shown an interest in financing the purchase of PCP, but would lend up to approximately ¥90 billion only, meaning that mezzanine finance would likely be needed as well.

daVinci conceded control of the asset having acquired the 32-storey office for a Japanese record of more than ¥200 billion in 2006. The firm, led by Osamu Kaneko, had been locked in discussions over extending the deadlines on repaying the debt on the building until late September but these talks failed to reach a mutual conclusion.

The building was 97 percent occupied in October, but lease cancellations have since resulted in the occupancy rate to fall by approximately 10 percent, the source said.