The fund acquired Prime Urban Meguro Mita in Tokyo’s Meguro ward (Image: Plaza Homes)
Integral Real Estate on Friday announced its acquisition of 10 properties in Japan, including assets previously held by a Nomura-sponsored REIT, for a total of JPY 20 billion ($130 million) on behalf of IRE’s maiden fund.
The newly created fund manager under TSE-listed investment group Integral Corp has completed its purchase of eight residential properties in Japan’s major cities and an office building in Tokyo’s Bunkyo ward, IRE said in a release. The firm additionally signed a sale and purchase agreement for a hotel development project in Fukuoka, bringing the portfolio to a total gross floor area of 26,000 square metres (279,862 square feet).
Integral Real Estate Fund I is a value-add strategy focused on small and mid-sized assets in Japan. The vehicle closed on JPY 10 billion in committed capital in January, with a final closing anticipated by the end of 2026.
“IREF I will continue to focus on discovering investment opportunities across diverse asset types including residentials, offices, hotels, logistics, retails and R&D centres in the Tokyo metropolitan area and other major cities nationwide with potential growth in Japan,” the firm said.
Nomura REIT Assets
Mingtiandi has come to understand that IREF I’s eight residential assets were acquired from Nomura Real Estate Master Fund, the REIT sponsored by Nomura Real Estate Development, earlier in March for JPY 10.8 billion. The properties changed hands at a 35 percent premium to their combined book value of JPY 8 billion, according to the trust’s manager.
Integral Corp representative director and founding partner Reijiro Yamamoto
The top asset by book value of the eight is Prime Urban Izumi, a 15-storey apartment building in Nagoya. Located in the city’s central Higashi ward, the 2008-vintage property is valued at JPY 3.1 billion and was acquired by Master Fund in 2011 for JPY 3.8 billion.
The portfolio also includes Prime Urban Meguro Mita, a 2008-era low-rise apartment block in Tokyo’s Meguro ward. Acquired by Master Fund in 2016 for JPY 1.06 billion, the asset’s current book value is JPY 1.1 billion.
The rest of the set consists of another Meguro asset, four in Chiba prefecture’s Ichikawa city and one in Miyagi prefecture’s Sendai, combining for a book value of JPY 3.8 billion.
The eight-storey office block acquired by IREF I, known as Unizo Koishikawa Urban Building, was built in 1987 and sits near Shin-Otsuka metro station in Bunkyo ward. The Fukuoka hotel project, meanwhile, is a forward-committed investment near JR Hakata railway station and will operate as Minn Hakata East upon completion of the 10-storey building.
The office and hotel assets were sold by unidentified real estate developers.
Blackstone, Phoenix Veterans
Led by representative director and founding partner Reijiro Yamamoto, Tokyo-based Integral Corp launched its real estate fund business last November under the stewardship of four partners with deep experience in regional property investment.
From left, IRE founding partners Tomohiro Sumiya, Hironori Nakai, Takanori Emura and Kensuke Nakahara
Tomohiro Sumiya joined IRE after nine years at Blackstone, where he chalked up JPY 2 trillion in real estate acquisitions and JPY 1 trillion in sales. Kensuke Nakahara most recently spent five years at Phoenix Property Investors and also worked at M&G and CapitaLand in Japan.
Hironori Nakai came aboard IRE after four years at CBRE Investment Management Japan, while Takanori Emura previously led the investment team at Myria Residential, a Tokyo-based subsidiary of a US state pension fund.
Integral Corp holds an initial stake of 89 percent in IRE. Another subsidiary, Integral Partners Corporation, does business as a private equity firm with a most recent fund size of JPY 250 billion ($1.7 billion).
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