Deals

Secured Capital wins race to buy Tokyo monolith

The firm led by Katsuya Takanashi emerges as the winner to buy the 418,000 square foot Tokyo office from lenders including Shinsei Bank, which seized control of the building when previous owner KK daVinci failed to meet its debt obligation on the building.

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Secured Capital Japan, the Tokyo-based investment and asset management firm led by president and chief executive officer Katsuya Takanashi, is to purchase Pacific Century Place, the central Tokyo office bought previously by rival firm KK daVinci for a record ¥200 billion ($2.26 billion; €1.54 billion) in 2006.

PERE can reveal that SCJ has won the race to acquire a 100 percent interest in the 32-storey office component of the Marunouchi building. The purchase price was not disclosed at this stage but according to those familiar with the bidding process, the building was unlikely to sell for more than ¥150 billion.

SCJ will hold the asset in its real estate fund series, the latest of which, SCJREP IV, closed on $525 million in August. The firm managed ¥600 billion of assets across its vehicles as of June 30 this year.

The firm said it would hold the asset “through this office cycle” and intends to enhance its value through active asset management.

The deal reflects a rare sale in a tight Tokyo office market as the majority of the assets are owned by Japan’s largest real estate firms, such as Mitsubishi and Mitsui on long term strategies. The last headline-grabbing sale of a large office in Tokyo happened in May when Japanese insurance firm Nippon Life purchased AIG’s headquarters for $1.2 billion.

J-P Toppino, president at SCJ, billed the purchase as “a once in a lifetime opportunity”. He said: “We have the opportunity to acquire a true Class A building in Marunouchi at or very near the bottom of the market with attractive long term financing, which allows ample time to execute our business plan.”

The building was placed on the market by its debt providers, led by senior lender, Shinsei Bank, which seized control of it after previous owner, KK daVinci, failed to meet its debt maturity in September.

The bank hired Mizuho Trust to find a new manager with a view to securing a deal before the year was out. Secured Capital Japan is believed to have beaten approximately 50 other international and domestic bidders, including The Carlyle Group and railway operator East Japan Railway as well as Mitsubishi and Mitsui.