GIC mulls Tokyo property sale for several hundred billion yen: sources

[TOKYO] GIC, Singapore’s sovereign wealth fund, is considering selling its stake in an office building in central Tokyo for at least several hundred billion yen, people familiar with the matter said.

The fund will look for buyers for its holding of the office space section of the Pacific Century Place Marunouchi from the 8th to 31st floors, said the people, who asked not to be identified discussing confidential information. It acquired the property from PAG-backed Secured Capital Investment Management for about 180 billion yen (S$1.5 billion) in October 2014.

Real estate services firm Jones Lang LaSalle and Mizuho Trust & Banking have been selected to advise on the possible sale, and they have begun sounding out companies and foreign real estate funds about whether they would be interested in bidding for the property, the people familiar with the matter said.

Investor demand for commercial properties in Tokyo has been strong, as shown by recent deals worth around 400 billion yen by the KKR and PAG duo, and another by Blackstone But expectations that the Bank of Japan will continue raising interest rates after four hikes since March 2024 have fuelled concern that higher borrowing costs will start to weigh on the real estate market.

Spokespeople for GIC were not immediately available to comment. A JLL spokesperson declined to comment, while a Mizuho Trust Bank spokesperson declined to comment on specific deals.

The building, completed in 2001, has 32 stories above ground and four basement floors. It is a short walk from Tokyo Station. Tenants include the Four Seasons Hotel Marunouchi Tokyo, Shell Japan and LaSalle Investment Management.

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GIC, which had its office in the building, moved out to a bigger office in the nearby Shin-Marunouchi Building earlier this year. The firm’s chief investment officer Bryan Yeo said in a 2024 interview with Bloomberg that it’s expanding its Japan-related deals team and expected to increase the number of deals it does. BLOOMBERG