Japan’s Ichigo to Acquire Private Tosho Tokai REIT and Manager

Japanese property and infrastructure company Ichigo has agreed to acquire all shares of Tosho Tokai REIT and the unlisted trust’s asset management firm for an undisclosed price.

Tosho Tokai REIT owns 24 high-quality residential assets in Aichi prefecture, Ichigo said Monday in a release. The trust’s shares are currently owned by a group of seven shareholders, while Tosho Asset Management is wholly owned by listed property group Tosho Co.

Upon completion of the acquisition in August, Ichigo will temporarily own 100 percent of Tosho Tokai REIT shares, making the trust a subsidiary. Going forward, Ichigo will solicit investments from third-party investors to reduce the company’s shareholding while leveraging its value-add and asset management capabilities to maximise the REIT’s shareholder value, it said.

“The acquisition will further expand sales channels for Ichigo’s value-add assets and drive the growth of its asset management business,” said the company led by chairman Scott Callon.

Execs Cash Out

Tosho Tokai REIT has no material capital or personnel relationship with Ichigo, according to the announcement.

The trust’s largest shareholder is Tosho Co chairman and founder Toshihiro Kutsuna, who holds 41.21 percent, followed by president Yuichiro Kutsuna with 10.91 percent and various banking and investment groups with the remainder.

Although the acquisition is not forecast to have an impact on Ichigo’s current fiscal year earnings, the deal will contribute to the growth of Ichigo’s asset management business and stock earnings, the TSE-listed company said.

Ichigo focuses on sustainable real estate, asset management and clean energy. Chairman Callon also serves as CEO of Ichigo Asset Management, which manages billions of dollars invested mainly on behalf of US and European charities and endowments.

Portfolio Revamp

Ichigo’s pending buy of the residential trust follows a string of asset sales to the company’s office REIT this year.

In May, Ichigo Office REIT announced the acquisition of three office assets in central Tokyo and three in central Fukuoka for a total of JPY 15.4 billion ($99 million), including four from its sponsor and two from an Ichigo-affiliated fund.

The REIT funded the acquisitions with the sale of two ageing buildings to undisclosed buyers for a total of JPY 4.5 billion ($29 million).

After those transactions, Ichigo Office’s portfolio stood at 89 office assets with an acquisition value of JPY 220.1 billion.