Mitsubishi Estate Selling 9% Stake in Shinjuku Office Complex to J-REIT for $128M

Mitsubishi Estate is selling a stake in a landmark office complex in Tokyo’s Shinjuku ward to a TSE-listed REIT sponsored by the developer for JPY 20.4 billion ($128 million).

Japan Real Estate Investment Corporation has agreed to acquire a 9 percent interest in Shinjuku Eastside Square, representing 10,527 square metres (113,312 square feet) of net rentable area, JRE’s manager said Wednesday in a release. The purchase will raise the trust’s holding in the office block to 48 percent, with the deal set to close Friday.

With the additional stake, JRE expects to enhance operational efficiency and strengthen the competitiveness of the 2012-built property while expanding the REIT’s asset base in central Tokyo, where Grade A office rents in the five main wards jumped 6.2 percent on a sequential basis in the fourth quarter of 2025 amid limited supply and near-record low vacancy, according to Colliers. 

“The property is situated in a favourable location in central Tokyo and has high specifications and functionality, which JRE determined will contribute to enhancing its mid- to long-term competitiveness and expanding its asset size,” the trust’s manager said.

Tech Tenants

Located in Shinjuku sub-centre, a major skyscraper district west of Shinjuku station, Shinjuku Eastside Square features large floorplates of 5,914 square metres. The building serves as the global headquarters of video game publisher Square Enix, and other key tenants include e-commerce operator Rakuten and finance giant Citibank.

“For its sophisticated and eye-catching design, the property serves as a landmark in the surrounding neighbourhood,” the manager said. “It is also directly connected to Higashi-Shinjuku subway station and within walking distance from Shinjuku station, where a number of railway and subway lines are available, enjoying the locational advantage.”

JRE has gradually built its stake in Shinjuku Eastside Square through a series of transactions with sponsor Mitsubishi Estate since 2014. The latest deal values the 89 percent-leased complex at JPY 226 billion ($1.4 billion), or JPY 1.93 million per square metre of leasable area, and implies a 3.2 percent cap rate.

Upon closing, JRE will lease back the acquired space to Mitsubishi Estate, which will then sublease it to third parties under a pass-through master lease contract, the manager said.

JRE’s portfolio currently consists of interests in 78 properties across Tokyo and other major Japanese cities with a total acquisition value of JPY 1.17 trillion ($7.4 billion). 

Market Tightening

Tokyo’s Grade A office market in the five central wards of Chiyoda, Chuo, Minato, Shinjuku and Shibuya saw a further tightening in late 2025 as strong leasing demand continued to exceed available supply, Colliers said in its latest update.

Grade A monthly rent in the five wards averaged JPY 10,920 per square metre during the final quarter of the year, up from JPY 10,290 in the preceding three months, as vacancy eased 0.2 points to 1.3 percent, compared with end-2024 readings of JPY 9,890 and 2.7 percent.

“Rising corporate earnings and intensifying talent competition are sustaining strong relocation demand toward high‑quality offices in prime locations,” the consultancy said. “A growing number of companies are prioritising workplace quality to enhance talent acquisition, further strengthening demand for Grade A properties.”