Hulic REIT Sells Two Japan Data Centres to Sponsor for $39M

Hulic REIT has sold two ageing data centres in central Tokyo and Nagano to the TSE-listed trust’s sponsor, Japanese real estate giant Hulic, for JPY 5.7 billion ($38.6 million).

The deal’s headline asset, Ikebukuro Network Center in the capital’s Toshima ward, changed hands for JPY 5.35 billion, representing a 20.5 percent premium to the property’s estimated book value, the REIT’s manager said in a filing. Nagano Network Center, meanwhile, traded for JPY 350 million, a 22.8 percent premium.

The transaction closed Monday and enabled Hulic REIT to book gains for the 2001-built Ikebukuro Network Center and the 1994-era Nagano Network Center, both of which carry risks of rising repair costs and declining profitability, according to the manager.

“As both properties were acquired in 2014, the year of the IPO, and account for significant unrealised gains, it was decided to transfer these properties to realise these gains and return value to investors in order to contribute to an improvement in investor value,” the manager said.

Portfolio Purge

Ikebukuro Network Center spans 12,773 square metres (137,487 square feet) of total floor area and Nagano Network Center contains 2,211 square metres. IT capacity wasn’t disclosed.

The divestment of the two properties comes after Hulic REIT sold the 1995-completed Chiba Network Center to the sponsor in March for JPY 7.95 billion. Talks continue between the parties on the anticipated disposals of the trust’s remaining data centres in Tabata (Tokyo), Keihanna (Osaka), Atsuta (Nagoya), Hiroshima and Sapporo, the manager said.

As of the end of February, the suite of eight data centres was fully occupied and had generated six-month leasing revenue of JPY 11.2 billion.

Hulic REIT’s portfolio now comprises 65 properties, mostly offices, with a total acquisition cost of JPY 411.6 billion ($2.8 billion). Portfolio occupancy stood at 99.1 percent at the end of August.

Constrained Market

Tokyo continued to hold its position as a regional data centre hub at the end of the second quarter with aggregate capacity exceeding 4.2 gigawatts, up 2.7 percent from a year earlier, according to Knight Frank’s latest report.

Investment activity remained strong, the consultancy said, with Ares Management closing a $2.4 billion Japan-focused data centre fund through Ada Infrastructure and Mitsui & Co Asset Management’s acquiring a half-stake in a Greater Tokyo hyperscale facility for $122 million.

In all, Tokyo saw 41.1 megawatts of capacity transacted in the first six months of 2025, slowing from 286.6MW in the first half of 2024, due to reduced supply in the market, the report said.

“Tokyo continues to be a tightly constrained market, with co-location vacancy rates at just 7 percent,” Knight Frank said. “There are no sites available that can accommodate hyperscale-sized requirements. Additionally, 61.5 percent of the space currently under construction has already been pre-leased.”