TH Real Estate makes Japanese debut, buys Standard Life asset

TH Real Estate has made its debut investment in the Japanese property market, buying a multi-let asset from Standard Life Investments (SLI).

The SLI Global Real Estate Fund sold the mixed-use Ginza 1 Chome Building in Tokyo for around $82m (€73m).

Chris Reilly, managing director for the Asia Pacific at TH Real Estate, said Japan held further strong investment potential.

“As a business, we are committed to growing our business across the Asia-Pacific region,” he said.

“This latest investment complements our existing Asia-Pacific portfolio and aligns with our strategy of investing across the world’s most attractive real estate markets, identifying tomorrow’s ‘winning’ cities.”

The 49,000 sq ft asset includes retail and office space.

SLI paid £38.7m for the asset in 2014.

James Britton, manager of the Global Real Estate Fund, said: “We are pleased to have fulfilled our business plan for this building, working in close collaboration with our local partners – Sumitomo Mitsui Trust Bank and Sumitomo Mitsui Trust Real Estate Investment Management.

“Our strategy of taking on a degree of letting risk in a core sub-market has generated exceptional returns for investors.”

Britton said the fund’s remaining Tokyo office, Nishi-Shinbashi, continued to be a “core holding”, providing jurisdictional and currency diversification benefits.

The disposal represented an ungeared internal rate of return of 30.1% in sterling terms.

Shu Watanabe, director of capital transactions for Asia at TH Real Estate, said Tokyo’s demographic fundamentals made it a defensive long-term investment, supported by a highly developed social infrastructure and mature economy.

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