HKRI had acquired Souei Park Harayuku in 2015
Hong Kong developer HKR International has agreed to sell two Tokyo residential buildings for JPY 3.49 billion ($30 million), adding to a string of recent property disposals by HKRI in Japan.
The properties are a seven-storey, 22-unit building called Souei Park Harajuku in the Shibuya area and a six-storey, four-unit building known as Veneo Minami Azabu in the Minato area. The builder controlled by the Cha family which developed Hong Kong’s Discovery Bay is unloading the two assets for JPY 1.8 billion and JPY 1.68 billion respectively, according to a filing with the Hong Kong stock exchange on Tuesday.
The document identified the buyer as a company owned by Kentaro Shimamura, whose name matches that of Savills Investment Management’s head of fund finance for Japan. A spokesperson for Savills IM, which has a fund dedicated to Japan multi-family investments and has been actively acquiring assets in the market, said the firm was not involved in the deal with HKRI.
“In a market facing uncertainties, including those arising from the impact of the COVID-19 pandemic and any tightening of global monetary supplies, the directors are of the view that the disposal represents a good opportunity for the group to realise its investment in the properties with an attractive return,” chairman Victor Cha said in the filing.
HKRI Cashes in on Apartment Boom
The latest disposal comes after HKRI sold three Tokyo properties — two rental apartment buildings and an office tower — for JPY 19 billion combined last November, according to the Nikkei Real Estate Market Report.
HKRI chairman Victor Cha
A Minato-area apartment building called Horizon Place Akasaka changed hands for JPY 9.5 billion. The 2011-vintage building has 94 units across 18 storeys and a gross floor area of 7,378 square metres (79,416 square feet).
The other apartment building, known as Haluwa Shibakoen, transacted for JPY 4.08 billion. Completed in 2015, the property near Mita subway station has 84 units across 15 storeys and a gross floor area of 3,274 square metres.
The office tower, Graphio Nishi-Shinjuku, stands near Shinjuku subway station and was finished in 2007. It has a gross floor area of 2,537 square metres across 13 storeys, and tenants include web marketer Double and EYS Music School. HKRI sold the building for JPY 5.43 billion.
The buyer of all three properties was Daishin Asset Management, a unit of South Korean investor Daishin Securities.
Savills IM Targets Japan
Savills Investment Management launched its Japan Residential Fund II (JRF II) in 2020 with the firm announcing in October that year that it had reached a $200 million first close on the open-ended core vehicle targeting stabilised rental residential properties in Greater Tokyo and other major cities in Asia’s second largest economy.
The investment manager completed a pair of acquisitions on behalf of the fund in June of last year, adding some $210 million in assets in Tokyo, Osaka and Nagoya. “JRF II will selectively invest outside Tokyo, but we will continue to focus on the capital, where we can acquire the best assets at compelling yields,” Savills IM Japan’s co-head Tom Silecchia said in a statement at the time.
“The attractiveness of the market is based on favourable funding conditions, as well as its stable political and economic fundamentals,” Tetsuya Kaneko, head of research and consultancy for Japan at the firm’s brokerage affiliate said in an article published in June last year. “As the world economy remains clouded by uncertainty, and abundant liquidity seeks investment opportunities, the Japanese residential market will likely continue to gain traction.”
Big Plans Back Home
The five disposal assets represent the entirety of HKRI’s investment property portfolio in Japan, though the group continues to own 646,000 square feet (60,015 square metres) of land on the island of Hokkaido for development into a high-end resort.
The HKEX-listed developer may be marshalling its financial forces as it prepares to add a 19th phase to its Discovery Bay project with joint venture partner CITIC Pacific.
The companies announced in January that they would invest HK$15 billion ($1.9 billion) to build 1,400 new homes at the master-planned community on Lantau Island.
The expansion plan was revealed four months after HKRI paid a HK$5.24 billion land premium to modify the designated land use for a 699,660 square foot plot north of Discovery Bay to allow for “residential, commercial and other” purposes.
HKRI estimates that the project will be completed in phases within the next eight years, with pre-sales for the first set of homes to begin in 2023.
The Cha family first acquired Discovery Bay in 1977, and state-controlled CITIC Pacific joined as a partner in 1994.
Leave a Reply