Shiba Park Building returns to the market

Shiba Park Building 2

Shiba Park Building, a landmark office building in central Tokyo, is being offered for sale again, with insiders suggesting it could sell for more than 160 billion Yen (1.3 billion USD). *Update: Several months later, the owners decided to take advantage of low borrowing rates to refinance rather than sell the building, with the net rental income providing a more attractive return than disposal of the asset. 

The 14-storey building has a total floor area of 103,000 sqm (1.1 million sq.ft), of which 83,000 sqm is leasable space. It was built in 1982 by Shuwa Corporation, a real estate developer that invested heavily in US properties during Japan’s bubble economy in the late 1980s. Shuwa was also the developer of numerous ‘Shuwa Residence’ vintage apartment buildings built across Tokyo and Saitama in the 1960s and 1970s.

The Shiba office building is located near Daimon, Hamamatsucho and Shiba Koen Stations and approximately 700 meters from Tokyo Tower. With a floor plate of nearly 6,000 sqm (64,500 sq.ft), it is one of the largest commercial floor spaces in Tokyo. Some of the main tenants include NTT Data, Mitsui Bussan Aerospace, the Pension Fund Association, and Sohgoh Real Estate.

Shiba Park Building
A floor plate

The building was acquired by Morgan Stanley in 2005 as part of Shuwa’s restructuring and eventual cessation of business operations. Morgan Stanley sold it in 2006 to K.K. daVinci Holdings for 143 billion Yen. At the time this was the largest transaction for a single building in Japan. After daVinci’s collapse, the building was transferred to creditors, and sold in 2013 to an investor group led by Asia Pacific Land for around 120 billion Yen (approx. 1.21 billion USD). The sale was the biggest transaction in Japan in 2013.

Minato-ku’s office vacancy rate was 5.46% in October 2015, down 0.58 points from last year, while average office rents have increased by 4.1% over the same period.

Location

2-4-1 Shiba Koen, Minato-ku, Tokyo

Sources:
Reuters, December 1, 2015.
The Nikkei Asian Review, March 6, 2014.
Miki Office Report, October 2015.

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