The Straits Trading Co. said Thursday it has increased its investments in Japan residential property via the Savills IM Japan Residential Fund, in which it is a limited partner.
Under the deal, the fund has subscribed for 6,950 preference shares of JPN Residential Holdings and 688,050 preference shares of JPN Residential TK Holdings for 1,000 yen each, Straits Trading said in a filing to SGX.
JPN Residential Holdings has made an equity investment Residence 4 GK and Residence 5 GK — known as TK Operator I and TK Operator II respectively — while JPN Residential TK Holdings has entered into tokumei kumiai agreements, or silent partnership agreements, to acquire the entire economic interest of the two entities’ pre-tax distributions, the filing said.
TK Operator I was already a subsidiary of Straits Trading, while TK Operator II became a subsidiary after the transaction, the filing said.
TK Operator I has acquired two four-storey rental residential apartment buildings in Tokyo, while TK Operator II has entered a forward purchase deal to acquire a 14-storey rental residential building currently under construction in Tokyo, the filing said. The building is expected to be completed in 2020, it added.
The total cost of the acquisitions is 3.08 billion yen, or around S$39.49 million, and will be funded by the 695 million yen from Savills IM Japan Residential Fund’s subscriptions in JPN Residential Holdings and JPN Residential TK Holdings and by bank borrowings, the filing said.
“All three properties are well positioned to capitalise on tenant demand for close proximity to key business hubs within the city and are located within short walking distances to metro stations,” Straits Trading said.
Savills IM Japan Residential Fund GP is the general partner managing the Savills IM Japan Residential Fund. In January 2018, Straits Trading invested 9 billion yen, then around S$106.51 million, in the fund via its subsidiary Straits Real Estate’s wholly owned subsidiary SRE Japan 11.