
Ebisu First Square spans 15,438 square metres in the trendy Ebisu area
A unit of Japanese conglomerate Mitsui & Co has acquired a 12-storey office building in Tokyo’s central Shibuya ward from a US investment firm, with the aim of offering digital securities backed by the asset in the company’s latest deal involving tokenized real estate.
Mitsui & Co Digital Asset Management purchased the property through a newly created fund jointly managed with Tozai Asset Management, the company announced without disclosing the acquisition price. The property, Ebisu First Square, measures 15,438 square metres (166,173 square feet) of total floor area and was developed in 2014 by Sapporo Real Estate, a subsidiary of Sapporo Holdings Limited.
The seller, US real estate investment management company Westbrook Partners, picked up the building from Sapporo Real Estate for an estimated $451 million in the first quarter of 2021, with a net operating income yield believed to be around 2.5 percent, according to a market report by JLL. The estimated sale price works out to $29,214 per square metre.
Beverage giant Sapporo Holdings Limited announced in June 2021 that it planned to sell the property to an undisclosed domestic company and was expecting a gain of around JPY 22 billion ($201 million) as a result of the sale.
Digital Securities
Ebisu First Square is located in a trendy neighbourhood at 20-3, Ebisu 4-chome, a few blocks east of Ebisu Station, which serves the Tokyo Metro and three lines of the East Japan Railway Company. The property sits on a 2,617 square metre site and includes one below-ground floor.

Takashi Ueno, president of Mitsui & Co. Digital Asset Management
The building faces streets on three sides, including the sloping Beer-zaka Hill, and its ground-floor retail space is occupied by Starbucks and other food and beverage establishments. Bandai Namco Music Live and Loyalty Marketing have their headquarters on the upper office floors, according to Nikkei Real Estate Market Report.
Mitsui & Co DAM, which is 53 percent owned by Mitsui & Co, said in a statement that it aims to provide individual investors with opportunities to invest in digital securities backed by the property through its ALTERNA service and other channels.
The company launched the ALTERNA platform for tokenized real estate in November 2021. As of the end of January, the platform’s total assets under management including digital securities and private funds for professional investors had reached JPY 210 billion.
The office transaction comes after Mitsui & Co DAM partnered with Japan Hotel REIT Advisors Co to acquire a 409-key hotel property in Minato ward last December with similar designs to tokenize the asset. The 25,718 square metre Royal Park Hotel Iconic Tokyo Shiodome near Ginza district occupies 15 floors of the mixed-use Shiodome Tower.
Mitsui & Co DAM has also acquired residential properties in Tokyo’s Roppongi area and a distribution centre on Rokko Island off the coast of Kobe as part of the tokenization strategy. The company has a project pipeline of more than JPY 200 billion in assets to be tokenized, with plans to reach JPY 500 billion or more by March 2025.
Founded in 1994 by former Morgan Stanley executives, Westbrook Partners has offices across the US and overseas, including in Tokyo, and has raised and invested over $14 billion of equity in more than $50 billion worth of global real estate deals.
Selective Appetite
The Shibuya sale is the latest in a string of deals for well-located office assets in Tokyo as leasing demand stages a slow recovery in the city’s five central wards. Average grade A office vacancy in Shibuya was just 1.2 percent in the fourth quarter of 2022, while high rents in the submarket suggested solid demand from tech companies, according to a report by Colliers.
Another unit of Mitsui Group, Mitsui Fudosan Co, announced last month it was selling portions of two office towers in the city to a REIT it manages, Nippon Building Fund, for a total of JPY 47 billion. The 22,429 square metres of space are located at Iidabashi Grand Bloom and Toyosu Bayside Cross Tower in the special wards of Chiyoda and Koto, respectively.
In December, Mingtiandi reported that LaSalle Investment Management had agreed to buy a mixed-use tower in Tokyo’s Shinagawa City from Blackstone for close to JPY 13.5 billion. The property, TK Ikedayama Heights, is home to one of WeWork’s locations.
Last year’s most notable deal took place in September, when a domestic consortium led by Tosei Asset Advisors and Hulic won a tender for the Japanese Ministry of Finance’s share in Otemachi Place, an office building just east of Imperial Palace, with a JPY 400 billion ($2.7 billion) bid.
Craig Pearce, managing director of Tokyo-based real estate advisory firm Nikota Capital, pointed out that vacancy rates have increased and rents have decreased correspondingly, across most major office submarkets in the city since early 2020.
“With a sizable amount of new product scheduled to be delivered between now and 2025, the market is likely to remain soft for some time,” Pearce noted to Mingtiandi. “Investors are being increasingly selective when it comes to office investments. Well-located, newer, higher quality office buildings are certainly performing better in the current environment.”
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