Blackstone is making a seismic bet on a property market on the other side of the globe.
The private equity giant acquired Tokyo Garden Terrace Kioicho in Japan’s biggest city for $2.6 billion, CoStar reported. The deal works out to $1,083 per square foot for the 2.4-million-square-foot mixed-use complex. It’s the largest real estate investment by a foreign entity in Japan’s history, according to Blackstone.
Seibu Holdings was the seller of the downtown Tokyo complex, which comprises fully occupied office space, 135 luxury residences, a 250-key hotel, conference and wedding venues and dozens of restaurants, retail shops, cafes and more. Seibu announced plans in the spring to sell its real estate portfolio to capture unrealized profits.
Seibu will continue to be involved in the property’s operations, the company’s president said in a statement. The company will use proceeds from the sale fund property acquisition, resort development and redevelopment of downtown assets.
Japan’s Ministry of Foreign Affairs opened the country’s doors to investors from abroad, setting a goal of bringing in more than $6 trillion in direct foreign investment by 2030. In the first nine months of this year, there were $25.7 billion commercial real estate investments in the country, according to JLL.
Investors are intrigued by the country due to its cheap currency and low borrowing costs, according to the Japan Times.
Blackstone dipped its toes in Japan’s waters before, building a portfolio of hotels, rentals, logistics facilities and data centers.
Four years ago, Blackstone acquired a portfolio of commercial and residential properties from Hong Kong-based PAG for $1.06 billion, picking up assets mainly situated in Tokyo and Osaka. That deal brought the private equity firm’s acquisitions in the country in 2020 to $5.2 billion.
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