Singapore’s sovereign wealth fund GIC on Tuesday announced it will acquire a 43 per cent stake in Shinjuku MAYNDS Tower, a 34-storey office tower in Tokyo, from Daiwa Office Investment Corporation for JPY62.5 billion (~$558 million). The deal marks one of the largest property transactions in Japan this year.
Daiwa Office Investment Corporation will retain the same stake as GIC, while the remaining stake will be held by a domestic company.
GIC manages funds on behalf of the Government of Singapore and the Monetary Authority of Singapore (MAS). It is estimated to have assets under management (AUM) of $398 billion by the Sovereign Wealth Center as at December 2017.
GIC has emerged as a global investor with a medium-term and long-term commitment to the real estate market in Japan’s mature economy. According to its investment report for 2016/2017, as at 31 March 2017, Japan accounts for 12 per cent of its total portfolio while property accounts for 7 per cent.
The latest addition to GIC’s property portfolio, Shinjuku MAYNDS Tower, is a high-quality office building in Shinjuku, one of Tokyo’s largest commercial and retail districts. Located in the newly-redeveloped area south of Shinjuku Station, the asset offers access to the main JR Shinjuku Station as well as direct underground access to multiple subway lines.
In an official statement, Lee Kok Sun, Chief Investment Officer, GIC Real Estate, said, “This investment in Shinjuku MAYNDS Tower is a unique opportunity to acquire a sizeable and stable income-producing asset, well-positioned in the market to capture its future growth potential.”
“We have been investing in Japan for nearly 30 years and remain confident in Japan’s continued growth in the long run. As a long-term value investor, we will continue to pursue opportunities to invest in quality assets with steady cash-flows. We look forward to partnering with Daiwa Real Estate Asset Management to enhance the value of this asset.”
The move to invest in property by the city-state’s sovereign wealth fund comes as it prepares for a period of protracted uncertainty and low returns, with its latest property investments being part of a value preservation strategy. Earlier this year, GIC acquired a 51 percent stake in the Sheraton Grande Tokyo Bay Hotel near Tokyo Disney Resort for $464 million, from U.S. buyout fund Fortress Investment Group.