Featured in December 2010, Issue6 Wait and See Approach Overseas funds are "Japan passing," waiting for signs of a rebound

Although the global real estate investment market has emerged from its worst period ever and has started on the road to recovery, interest in Japan, where there is little sign of bottoming out, is weak. Howeber, some are beginning to move into Japan because they have seen the market turn.

Green Building Law May Burden Landlords

Property owners hustle to adopt regulations

Rents and Relocations: Shinjuku Ward

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• 02.10.2010 NTT Urban incorporates Y22bn in properties into fund On February 4, 2010 NTT Urban Development announced that it would incorporate three buildings to NU-6, a real estate investment fund that NTT plans to create. Although the total sales price of the three buildings is 22.05 billion yen [$240 million], the individual prices have not been announced. The total gain from the transfer is approximately 15 billion yen [$160 million].

• 02.10.2010 Tenwas sells Aoyama condominium to H.K. investor Tenwas, a Minato-ku-based private company, sold Luna Pass Minami-Aoyama located in Minami-Aoyama, Minato-ku, Tokyo in October 2009. The purchaser was Good Talent Finance, which is an entity registered in the British Virgin Islands. As of January 2010, renovations were under way.

• 02.09.2010 Japan Logistics Fund to acquire Y7.8bn logistics facility from ProLogis In February 2010, Japan Logistics Fund (JLF), a REIT, decided to acquire a logistics facility in Narashino City, Chiba Prefecture. The seller is a special purpose company that was established by ProLogis. JLF will acquire 90% of the joint ownership in the entire facility for 7.88 billion yen [$85 million], while ProLogis will continue to own the remaining 10%.

• 02.09.2010 Less vacancies for logistics facilities, rents remain stagnant; CBRE The average large-scale logistics facility vacancy rate in the greater Tokyo area was 14.2% as of December 2009, an improvement of 5.7 points over the past three months. According to the results of a survey conducted by CB Richard Ellis in January 2010, this improvement can be attributed to the fact that one newly completed large-scale facility had a high occupancy rate, while a substantial volume of area was accounted for in new lease agreements at several new facilities.

• 02.08.2010 Simplex REIT acquires former Mitsukoshi Ikebukuro, financed by Yamada Denki Simplex REIT acquired the former department store Mitsukoshi Ikebukuro in Higashi-Ikebukuro, Toshima-ku, Tokyo on January 29. This was its first property acquisition for the REIT. The acquisition cost was 75 billion yen [$800 million]. Yamada Denki, which is currently using the property as a home appliance store, financed the entire acquisition.

• 02.08.2010 Transaction price of Ebisu building €37mn; Deutsche Bank It has come to light that the acquisition price of Frontier Ebisu was approximately 37 million euros ($51 million). The building was acquired by a real estate fund of RREEF Alternative Investment, which is part of the Deutsche Bank Group, from Sun Frontier Fudousan in January.

• 02.05.2010 Microsoft relocating head office to Shinagawa Grand Central Tower Microsoft is relocating its head office to Shinagawa Grand Central Tower, according to sources. It is believed that the company will lease approximately 11,000 tsubo [36,000 m2] of floor space in the building, which is adjacent to the Konan Exit (East Exit) of JR Shinagawa Station, but the details including the timing of the relocation have yet to be disclosed.

• 02.05.2010 Bonds of SPC owning Davinci Shiba Kouen default On February 3, Davinci Holdings revealed that corporate bonds issued by the special purpose company (SPC) that owns the Davinci Shiba Kouen, a property managed by a fund of Davinci, had defaulted. The company explained that the processing of the property will proceed under the lead of the bondholders and the probability of it being sold has heightened.

• 02.03.2010 Mitsubishi Estate opening first Kyoto building, nearly fully occupied Mitsubishi Estate completed construction of the Shijo Karasuma Center Building, the first office building that the company has developed in Kyoto. The building will be nearly fully occupied by a number of companies including vocational certification school TAC. The property is close to the Shijo Karasuma intersection, a financial and business center in Kyoto.