Japan’s Aeon REIT Buying Two Malls for $170M

Tokyo-listed Aeon REIT has agreed to buy two shopping centres, including the largest mall in Japan’s Wakayama prefecture, for a total of JPY 21.3 billion ($170 million).

The JPY 477.8 billion trust sponsored by retail giant Aeon Co will pay JPY 16.84 billion for Aeon Mall Wakayama and JPY 4.46 billion for Aeon Mall Miyakonojo Ekimae in Miyazaki prefecture, the REIT’s manager said Monday in a release.

The seller, identified as Godo Kaisha Double O7, has no “particular relationship” with the manager or its investment corporation. Both properties are master-leased to operator Aeon Mall, whose majority shareholder is Aeon Co.

The acquisition of the two assets will be financed with JPY 9.3 billion in bank loans and a JPY 10.3 billion issuance of new Aeon REIT units, according to separate announcements on Monday and Thursday. The deal is expected to close on 1 February.

Kansai Retail Attraction

Aeon Mall Wakayama is a five-storey building with a total floor area of 95,350 square metres (more than 1 million square feet). Eight annexed buildings and two parking lots bring the property’s total leasable area to 123,318 square metres.

As the biggest shopping mall in the prefecture located in the Kansai region of south-central Honshu, the facility houses tenants including Aeon Cinema, Toys “R” Us and a 1,000-seat food court. A direct connection to Wakayamadaigakumae railway station provides a link to the Wakayamashi interchange station roughly 6 kilometres (3.7 miles) to the south in downtown Wakayama city.

Aeon Mall Miyakonojo Ekimae is the largest mall in southern Kyushu’s Miyakonojo city, with 62,324 square metres of total leasable area. The community-focused mall contains roughly 100 stores offering daily necessities, apparel, sporting goods and food, including the 160,000-population city’s first Starbucks.

Aeon REIT’s portfolio comprises 47 retail assets (45 in Japan and two in Malaysia) with a total leasable area in excess of 4 million square metres. The properties are considered fully occupied and are more than 17 years old on average.

Market Stirs to Life

Shopping centre deals are heating up in Japan as the country’s border reopening boosts market confidence in the retail and tourism sectors.

Last October, a Japanese buyer bought the Ameyoko Center Building in Tokyo from Hong Kong-based PAG for $53 million. Colliers, which brokered the deal, said the 400-store facility was close to 90 percent occupied with rents up 30 percent from the start of the pandemic to late 2022.

A month earlier, Tokyu REIT had purchased a stake in the Futako Tamagawa Rise mixed-use complex in Tokyo’s Setagaya ward for JPY 20.2 billion ($140 million).

In June of last year, Australia’s Lendlease teamed up with Dutch pension fund manager PGGM to buy Leaf Minatomirai, a 46,000 square metre retail facility in Yokohama, according to a Savills report.