This article is from the Australian Property Journal archive
ASTRO Japan Property Group (ASX: AJA) has purchased a 21% interest in a commercial property in greater Tokyo for ¥300 million ($A3 million).
The property comprises the lower floor retail and commercial sections of two high-rise residential towers – Skygate Tower and Skycross Tower – located close to Mitaka station, in western Tokyo.
Completed in 2010, the property was acquired for a total cost of ¥4.0 billion to ¥4.5 billion ($A40 million to $A45 million) by a special purpose, property owning Japanese company (SPC) into which AJA and co-investors contributed equity by a tokumei kumiai (TK) or Japanese partnership.
The investment was arranged by AJA’s Japan Asset Manager, Spring Investment Co., Ltd (Spring) in conjunction with Xymax, one of Japan’s largest property management companies. Both the Spring group and the Xymax group are co-investors in the TK, along with other private investors arranged by Spring. Spring and Xymax will act as co-asset managers.
AJA chairman Allan McDonald said this the trust’s first new investment since the onset of the global financial crisis more than five years ago.
“The acquisition illustrates a key element of our previously announced strategy of making capital available for more efficiently leveraged investment. We will continue to look for refinance and portfolio rebalancing opportunities in the market to further enhance earnings,” he added.
The total investment cost was predominantly funded with a new 5 year loan to the SPC, with the balance funded by the TK equity investors. The lender is a major Japanese bank. The loan is non-recourse to AJA and its co-investors.
The acquisition, which will be equity accounted by AJA, is expected to be approximately 0.7 cents per security accretive to AJA’s annual pre-tax earnings. AJA expects the investment to generate over $A360,000 or approximately 0.5 cents per security in net additional distributable cash on average annually.
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