St Martins, the UK-based property vehicle for the Kuwaiti Investment Authority, has made its first move into Asia.
The sovereign wealth fund has acquired a luxury 27-story high rise residential tower in central Tokyo for ¥13 billion ($142 million; €109 million), it said.
The Lietocourt Arx Tower is centrally located in Minato, Chuo-Ku, adjacent to Nihonbashi and Ginza, Tokyo’s business and retail district. The building was completed in February 2007, and comprises 281 serviced apartments totalling over 29,701 square meters. KK daVinci Advisors, a Tokyo-based fund manager, sold the property.
The acquisition was partially financed by a bond issue to The Tokyo Star Bank Limited, arranged through the Real Estate Finance desk of Nikko Citigroup, said St Martins.
Nigel Brown, managing director, added in a statement: “This is the first of what we anticipate will be a number of investments in the region, subject to pricing and timing. Whilst we have been considering investment opportunities throughout Asia, including China, Hong Kong, Singapore Vietnam and Australia, our future Asian strategy is likely to focus on Japan, China and Australia.”
He added the firm expects a correction in pricing of real estate in China to make investments more attractive in comparison to the UK and other developed markets, though it will still scout landmark buildings in major cities in Continental Europe and the UK. In May last year the fund bought a 23-story tower in Central London from property company, British Land, for €500 million ($786 million).
The Kuwait Investment Authority, a commodity sovereign wealth fund, was created in 1953 from oil revenues and was the world's first sovereign wealth fund to be launched. Its fund is estimated to be worth around $250 billion.
KK daVinci Advisors is a wholly-owned subsidiary of KK daVinci Holdings, which was founded by Osamu “Sam” Kaneko in 1998 and is listed on the Hercules Exchange.