AXA IM Acquires Mixed-Use Property in Tokyo’s Shibuya Area for $48M

One of the most prolific foreign investors in Japan’s real estate market is back for more, with AXA IM Alts picking up a newly built mixed-use property in a central Tokyo tech hub for €41 million ($48 million).

The alternative asset arm of AXA Investment Managers bought the property in the Ikejiri Ohashi submarket at the fringe of the bustling Shibuya area from local real estate firms Raysum and Tokyo Tatemono, according to a press release.

Just completed in May, the property at 2-22 Ohashi Meguro-ku comprises two adjacent buildings, each with two floors and a basement, and provides 4,750 square metres (51,129 square feet) of commercial space, meaning AXA IM Alts paid roughly $10,105 per square metre.

“AXA IM Alts believes that Ikejiri Ohashi is becoming an increasingly desirable office submarket for IT, marketing and apparel companies, attracted by the established residential offering, open spaces, relatively affordable rents and its accessibility,” said the French fund manager, which acquired the asset on behalf of clients.

Office Sweet Spot

The property was developed by Raysum in a joint venture with Tokyo Tatemoto, with Raysum holding majority ownership of the land. The buildings are a one-minute walk to the new Toho University Ohashi Medical Centre and a four-minute walk to Ikejiri Ohashi railway station, which sits one stop away from Shibuya station and eight stops (about 21 minutes) from Otemachi station in Tokyo’s central business district.

The Ikejiri Ohashi submarket has benefited from an urban regeneration project and the trend of businesses downsizing their headquarters to smaller, lower-density office space as a result of changing working habits caused by the COVID-19 crisis, said AXA IM Alts, which manages assets worth €163 billion worldwide.

Alyssa Partners Japan, an independent asset manager, sourced and negotiated the acquisition of 2-22 Ohashi Meguro-ku on behalf of AXA IM Alts and will continue to act as a co-asset manager alongside the European firm.

A source familiar with the transaction told Mingtiandi that one of the two buildings is leased to an established Japanese apparel company, while the other is being kept vacant in anticipation of a market recovery. The empty space is suitable for office, retail, showroom or medical facilities, the source added.

In addition to its relationship with AXA, Alyssa announced in January that it had teamed up with US-based fund manager PGIM Real Estate on the JPY 9.2 billion ($88 million) purchase of four newly completed apartment projects in Tokyo containing 282 homes.

Overcoming COVID

Despite the pandemic’s chilling effect on in-person dealmaking, AXA IM Alts has fired off a string of acquisitions in Asia’s second-biggest economy across multiple real estate categories.

The firm revealed in May that it would pay JPY 4.2 billion ($38.6 million) for 282 rental units in the city of Sendai, notching its 15th investment in the country’s residential market on behalf of clients.

Before that northern excursion, the fund manager had scooped up a JPY 70 billion ($669 million) Tokyo apartment portfolio late last year and made a pair of acquisitions in the city of Nagoya in mid-2020: an apartment complex in Nakamura ward for JPY 20 billion ($186 million) and a 10-storey residential tower in Chikusa ward for an undisclosed sum.

AXA’s industrial deals have included the JPY 39 billion ($368 million) acquisition of a Tokyo-area warehouse leased to Amazon as part of a joint venture with Hong Kong-based ESR, announced in August 2020, as well as the purchase of its first data centre in Japan, a 20,000 square metre facility near Tokyo, for JPY 22 billion ($210 million) late last year.