Gaw JV Buys Central Tokyo Mall for $1B as Japan Dealmaking Stays Hot

Fund manager Gaw Capital Partners has acquired an 11-storey mall in Tokyo’s prime Ginza district under a joint venture with Patience Capital Group, with market sources who spoke to Mingtiandi on Friday confirming a deal value of $1 billion.

Hong Kong’s Gaw holds a 91 percent stake in the JV for Tokyu Plaza Ginza, with Singapore-based Patience owning a 9 percent share, the companies said in a release. Market sources named Sumitomo Mitsui Trust Panasonic Finance as the seller of the property, which spans 50,093 square metres (539,197 square feet) of gross floor area and connects to Ginza station of the Tokyo Metro.

Privately held Gaw is taking over the management and leasing of Tokyu Plaza Ginza and plans to transform the 2016-vintage mall into a “vibrant” retail destination. Patience, a Japan-focused private equity firm led by former GIC executive Ken Chan, will help refresh the tenant mix.

“By combining Patience Capital Group’s ability to source unique opportunities and Gaw Capital’s extensive retail experience, we are confident in our ability to reposition the mall as a premier retail destination,” said Isabella Lo, managing director and head of Japan at Gaw. “With favourable macroeconomic fundamentals supporting Japan’s retail sector, this is a highly opportune time to invest.”

Neighbourhood Revamp

Set at the heart of one of Asia’s most prestigious shopping districts, Tokyu Plaza Ginza occupies an entire block with four-sided frontage. Gaw expects a further value boost from the conversion of the adjacent Tokyo Expressway into a pedestrian walkway, a project scheduled to partly open in 2029.

The mall buy, which values the property at $19,963 per square metre of gross floor area at the reported consideration, is the largest-ever Japan investment made by Gaw, which manages $4.7 billion in assets in the country. The deal comes as part of a flurry of activity by the family-controlled firm to start the Year of the Snake.

Gaw and JV partner KKR have held talks on a potential JPY 100 billion ($660 million) sale of the Hyatt Regency Tokyo to Japan Hotel REIT, according to market sources. The firms joined forces to buy the 746-key luxury hotel in Shinjuku ward less than two years ago for a reported $409.3 million, in a deal backed by South Korea’s MDM Asset Management.

Closer to home, Gaw is leading a HK$2 billion ($260 million) fundraising effort for Hong Kong real estate group CSI Properties, with the firm kicking in HK$758 million in new equity capital and HK$500 million in debt financing from senior unsecured notes.

Influx Continues

Gaw’s latest mega-deal is part of a rush of foreign investment into Japan fuelled by the soft yen, low borrowing costs and undervalued assets.

In December, US private equity titan Blackstone announced plans to buy the Tokyo Garden Terrace Kioicho commercial complex from Seibu Holdings for $2.6 billion, a sum that would mark the largest-ever real estate acquisition by a foreign investor in Japan.

Last month, Canada’s Brookfield Asset Management acquired a stake in the Gajoen commercial complex in Tokyo’s Meguro ward, and a Nagoya logistics project, for a total of $1.6 billion.