Mapletree Sells Retail Building in Osaka’s Namba Shopping District for $360M

Singapore’s Mapletree Investments has sold a 10-storey retail tower in one of Asia Pacific’s most expensive shopping districts to Japan’s fifth-largest electronics and home appliance retailer as consumer spending rebounds in Asia’s second-biggest economy.

The Temasek Holdings owned fund manager sold the Edion Namba Main Store on Osaka’s Midosuji Street to its occupant and namesake, Japanese consumer electronics company Edion, for JPY 54 billion ($360 million) in an agreement signed in late October, according to a disclosure by the Japanese firm.

Edion, which explained the acquisition as a way to stabilise its operations and reduce expenses, did not name the vendor in its statement, and Mapletree has yet to comment on the disposal, with Mingtiandi having confirmed the parties in the transaction through market sources in Japan.

“The management team decided to acquire the beneficiary interests in trust of the said land and building, since it judged that the acquisition facilitates the Company not only to reduce costs but also to maintain long-term and stable store operations,” the company said in the statement.

Central Shopping District

Edion is financing the deal through cash on-hand and borrowings from undisclosed financial institutions, with the target of the transaction situated a 10-minute drive from Osaka Castle. Completed in 2019, the asset spans a total floor area of 22,974 square metres across ten floors – nine above ground and one below.

In its flagship store, Edion provides booths and floorspace for multinational companies including Lego and Bandai, with Edion pointing to the property’s location on the Midosuji shopping strip as central to its value.

“We fairly often see instances of a retailer buying a building for own/continued occupation where they consider it a prime/strategic location for their business. I’m sure this will be the case with Edion – the property is the heart of Namba at the end of the Ebisu Bashi Suji Shopping Street arcade, which is basically a continuation of the Shinsaibashi Suji Shopping Street arcade, which sees enormous foot traffic,” said a Japan representative of property consultancy Savills.

Mari Kumagai, head of research for Japan at Cushman & Wakefield, said that the asset benefits from its proximity to core transportation routes.

“Owning real estate located in top locations is not surprising for mass consumer electronics retail chains such as Edion as they could supplement their income with rent.” Kumagai said. “The asset’s location also makes it highly visible since it is near Namba station which boasts around 550,000 average daily passengers, making it the second most-used terminal station in the Greater Osaka area.”

According to a November report from Cushman & Wakefield, Osaka’s Midosuji shopping street took 6th place on the list of APAC’s most expensive retail destinations of 2023, moving up from 11th last year.

Rents in the Namba area where the store is located averaged $730 per square foot per year, up by 60 percent from last year, according to the agency. The figure surpassed Shinjuku where rents averaged $684 rent per square foot, pushing the famed Tokyo shopping hub into seventh place in APAC from sixth last year, according to Cushman & Wakefield.

A representative from Edion declined to disclose further details regarding the transaction or the assets, while Mapletree Investment had not responded to media inquiries by the time of publication.

Retail Recovers

Edion’s acquisition coincides with a Japanese retail rebound with investment in the country’s shopping assets surging to JPY 317.1 billion in the third quarter – up 71 percent from the same period last year – according to MSCI Real Assets.

Consumer spending in Japan rose to nearly JPY 297 trillion in the third quarter of this year, according to government statistics, recovering to levels not seen since before the Covid-19 pandemic, renewing investor faith in retail as an asset class.

Last Friday, Frankfurt-based Deka Immobilien sold a Tokyo department store wholly occupied by supermarket chain Don Quijote. The 1984-vintage asset with over 7,400 square metres of retail space was sold to its day-to-day operator for an undisclosed price.

In August, KKR-backed REIT Japan Metropolitan Fund sold a retail building in Tokyo’s Minato ward to an undisclosed buyer. The G-Bldg. Minami Aoyama 02 swapped hands in a JPY 5.4 billion deal at 4 percent above book value.