Marubeni’s United Urban J-REIT Unloading Kawasaki Toshiba Building for $130M

United Urban Investment Corporation has agreed to sell an ageing Greater Tokyo office building to an undisclosed buyer for JPY 19 billion ($130 million), with the TSE-listed REIT also planning to acquire more strata space in the capital’s Chiyoda ward.

The trust sponsored by Japanese conglomerate Marubeni Corporation will book a JPY 940 million gain on the sale of the Kawasaki Toshiba Building, United Urban said Wednesday in a release. The transaction is scheduled to close on 28 June.

The REIT acquired the building in Kanagawa prefecture’s Kawasaki, south of Tokyo, for JPY 19.2 billion in 2004 and is selling at a 6.7 percent markup to the asset’s JPY 17.8 billion book value.

The 1987-vintage office block comprises 36,142 square metres (389,029 square feet) of leasable space across 14 floors, generating annual rent of nearly JPY 1.7 billion. United Urban received a cancellation notice last May stating that the sole tenant, Toshiba Electronic Devices and Storage Corporation, would vacate the building by 1 June this year.

“The office market around the asset to be sold has not been performing well,” United Urban said. “And given the size of floor space, it is assumed to take a substantial period of time to search tenants and to require a certain level of rental discount compared to market rents for its lease-up.”

Adding Tokyo Strata Space

Also Wednesday, United Urban announced its intention to buy office and retail space totalling 238 square metres of gross floor area at the Iidabashi Plano complex in Chiyoda ward for JPY 383 million.

Iidabashi Plano sits within a three-minute walk of Tokyo’s Iidabashi railway station — a key interchange serving Chiyoda, Shinjuku and Bunkyo wards — and consists of a 17-storey office block, a 38-storey residential tower and three low-rise retail buildings.

United Urban will acquire part of the fourth floor of the office building and part of the second floor of a retail building, translating to JPY 1.6 million ($10,570) per square metre of GFA. The REIT previously acquired the 11th to 15th floors of the office building in March 2022 and part of the 17th floor of the office building and part of the second floor of a retail building in May 2022.

Both parts of the latest acquisition are fully leased by one tenant each, with the undisclosed seller continuing to occupy the office portion until 31 August this year. Upon completion of the deal on 26 June, United Urban will hold 4,564 square metres of Iidabashi Plano’s 70,055 square metres of GFA, having spent JPY 6.3 billion in total.

Osaka Bay Buy Complete

United Urban on Thursday completed its previously announced acquisition of a further 10 percent stake in the Osaka Bay Tower for JPY 2.6 billion, giving the REIT a 20 percent interest in the asset.

The 51-storey building — Osaka prefecture’s fifth tallest — is a retail and office property that forms part of the Osaka Resort City 200 complex. The seller of the stake was undisclosed.

Upon closing of the Kawasaki Toshiba sale, United Urban will own interests in 139 properties with a total acquisition value of JPY 679.4 billion ($4.5 billion).