ralph-lauren-omotesandoSecured Capital Japan and other investors are to buy the iconic Ralph Lauren building (also called Espoir Omotesando) along Omotesando Avenue for USD350 million in one Japan’s biggest real estate transactions of the year.

The building is to be acquired by the end of the month. Along with Secured Capital Japan, other investors include Orix and Trinity Investment. The total purchase price is 31 billion JPY with the three investors providing 7 billion JPY and the remaining 24 billion JPY to be provided by Germany’s Deka Bank.

According to Real Capital Analytics “with prices still near 36-year lows, Tokyo led all cities world-wide during the first half of 2010 with real-estate transaction volume exceeding $10 billion”. The No. 2 and 3 cities were London and Hong Kong.

This is a further indication of the Japanese real estate market bottoming out. Loan defaults were the cause behind many real estate transactions, but the rate of defaults has started to decline.

Demand for commercial or residential properties from funds is highest for properties in central Tokyo, where getting commercial-mortgage-backed finance is easier.

“Consortium Buys Lauren Building in Tokyo” Wall Street Journal, November 18, 2010
Bloomberg, November 20, 2010