Mitsui Fudosan Selling 30% Stake in Nagoya-Area Mall to J-REIT for $72M

Mitsui Fudosan is selling a 30 percent stake in a mall in Aichi prefecture to Frontier Real Estate Investment Corporation, a Tokyo-listed retail REIT sponsored by the Japanese property giant, for nearly JPY 11 billion ($72 million).

The consideration for the slice of LaLaport Aichi Togo includes JPY 5.2 billion for the building itself and JPY 5.7 billion for the land it sits on, Frontier’s manager said Monday in a stock filing. The 200-store mall opened in 2020 and is managed by Mitsui Fudosan, the country’s largest developer.

Situated in Aichi’s Togo town, a bedroom community for commuters to Nagoya and Toyota, the property is near two trunk roads, National Road 153 and Prefectural Road 57, and can also be accessed by a shuttle bus service from Aichi’s Nisshin railway station.

“In addition, the number of visitors to the surrounding community is likely to further increase due to the high density of the local population within a 10 kilometre (6.2 mile) radius and a land readjustment project now under way to redevelop the site and its neighbouring area,” the trust’s manager said.

Fully Leased

LaLaport Aichi Togo’s 186,029 square metres (2 million square feet) of floor space is 100 percent leased and hosts several outdoor goods retailers, including large-scale Alpen Outdoors and a Sports Depo outlet. The property also features Togo Park, an outdoor facility with a children’s playground and event-hosting amenities.

The agreed sale price for the 30 percent stake values the mall at JPY 37 billion and translates to JPY 198,894 ($1,311) per square metre of leasable area and a capitalisation rate of 4.7 percent.

Frontier plans to finance the acquisition with a combination of its own funds and loans, with the transaction scheduled to close on 26 March.

Completion of the deal will increase Frontier’s portfolio to 17 retail assets with a total acquisition value of JPY 375.7 billion ($2.5 billion), the manager said.

High-Powered Trusts

In addition to Frontier, Mitsui Fudosan sponsors Nippon Building Fund, Japan’s biggest REIT with a market cap north of JPY 1 trillion, and Mitsui Fudosan Logistics Park, the nation’s third-largest industrial REIT.

In November, MFLP completed its merger with Itochu Group-sponsored Advance Logistics Investment Corporation to create a combined trust with a portfolio of 49 industrial assets valued at JPY 576.5 billion ($3.8 billion).

As the surviving entity, MFLP absorbed 19 ADL properties, including three anticipated acquisitions of i Missions Park assets from Itochu’s pipeline.