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Tokyo office building put up for sale for more than US$1.3b: sources

[TOKYO] A group led by property investor Asia Pacific Land (APL) has put an aged but large office building in central Tokyo on sale, expecting to fetch more than 160 billion yen (S$1.8 billion), three people with knowledge of the deal said.

APL acquired the Shiba Park Building in 2013 for more than 125 billion yen along with US insurance magnate Maurice "Hank" Greenberg, the Abu Dhabi Investment Council and Hong Kong-based alternative investor PAG.

The acquisition was made when Tokyo's property market started recovering, thanks to aggressive economic measures taken by Prime Minister Shinzo Abe to end deflation.

The group, which is taking advantage of a quick recovery of Tokyo's property market, is expecting to sell the property to investors who would seek long term stable returns from properties, which include Japanese corporations and sovereign wealth funds, the people said.

The first round of bidding will close on Dec 11, they said.

Asia Pacific Land declined to comment. The sources declined to be named because the sale process is not public.

The imposing Shiba Park Building - nicknamed the "Gunkan", or "Warship", building - was built in 1982 and has more than 83,510 square metres available for rent, much more than other buildings in its neighbourhood.

Global sovereign wealth funds are expanding their presence in Tokyo as they seek stable returns from a city whose vacancy rates are falling and where office rents are expected to grow further.

Last year Singapore's sovereign wealth fund GIC Pte bought a Tokyo high-rise office tower for about 170 billion yen.

Earlier this year sovereign wealth fund China Investment Corp provided most of the capital for a more than 100 billion yen acquisition of an office and retail complex in Tokyo.

And Norway's Norges Bank Investment Management, which runs the world's largest sovereign wealth fund, opened an office in Tokyo in October to look for investment opportunities in Tokyo's prime office buildings.