Suchad Chiaranussati, chairman and founder of SC Capital Partners
SC Capital Partners has cashed in on Greater Tokyo’s rising real estate markets with the sale of a commercial block in Yokohama to a major local conglomerate, according to statements late last month.
The Singapore-based fund manager sold Icon Kannai, a nine-storey office building a few doors from Yokohama stadium to Keihan Holdings, the parent company of developer Keihan Real Estate, for an undisclosed sum in a deal which closed last month, according to the statements by the two companies.
The 1983-vintage building is located across the street from Basegate Yokohama Kannai, a 128,500 square metre (1.4 million square foot), multi-use project near the JR Negishi Line and Kannai station on the Yokohama subway, with SC Capital, which invested in Icon Kannai through its SCORE core fund series, pointing to the property’s location advantages as integral to the deal.
“We are pleased to have achieved a positive result for SCORE investors through the sale of Icon Kannai,” SC Capital Partners chairman and founder Suchad Chiaranussati said in a statement. “Our early conviction in Yokohama has been well rewarded, and Japan continues to deliver strong performance for SCCP across our key investment sectors. This transaction underscores the resilience and depth we continue to see in this market.”
Nice Neighbourhood
With 8,488 square metres (91,364 square feet) of office space and standard ceiling heights of 2.4 metres, Icon Kannai is fully leased, according to SC Capital. Current tenants include a local test preparation agency and audio software maker Animo, as well as companies in the insurance and real estate sectors.
Icon Kannai is located opposite a major Mitsui Fudosan project near Yokohama stadium (Image: SC Capital)
SC Capital points out that Kannai district, part of Yokohama’s Naka ward, is undergoing substantial government-supported revitalisation, with major projects set to enhance the area’s long-term attractiveness and commercial appeal.
The aging office building’s most magnetic attribute may be the developments going up around it, with Mitsui Fudosan having outlined its plans for Basegate Yokohama Kannai just over one year ago. A joint development with Kajima, Keikyu, Dai-Ichi Life and other Japanese giants, the complex will combine entertainment, retail, office space and a five-star hotel in a project built around Yokohama’s former city hall.
In the office portion of the project, Mitsui Fudosan is collaborating with local research institute the Stellar Science Foundation to develop a life sciences-focused innovation hub, while the hotel portion will be operated by Hoshino Resorts.
Basegate Yokohama Kannai will connect directly to the Yokohama stadium complex by covered walkways, with construction scheduled to have been completed at the end of the year. The grand opening for the complex is set for spring of this year.
Keihan president Hirakawa Yoshihiro said in a statement that the company is acquiring Icon Kannai, “…as part of its efforts to expand and strengthen its real estate rental business.”
Yokohama on the Rise
SC Capital’s Yokohama exit comes as the city less than an hour south of Tokyo Station by train has been figuring more prominently in fund manager strategies.
In December, Aberdeen Investments said that it had purchased a 228-unit apartment building located just over a kilometre (0.62 miles) southwest of Icon Kannai, in a move to expand its Japan residential bets.
KKR in November acquired Nissan’s global headquarters in Yokohama for JPY 97 billion ($630 million), and in April of this year Lone star bought a 175-room set of Yokohama apartments from Mitsui Fudosan for an undisclosed sum.
Monthly office rents in Yokohama rose 4.4 percent in the year ended 30 September, to reach JPY 17,000 per tsubo (3.3 square metres), according to Savills, while vacancy fell 2.7 percentage points to 6.3 percent.
