Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Mitsubishi Corp in final talks to buy Tokyo Ralph Lauren building for $342 mln -sources

31 January 2014, 10:41

Tokyo - Japan's Mitsubishi Corp is in final talks to buy the building rented by luxury retailer Ralph Lauren Corp for its flagship store in Tokyo's posh Omotesando area for about 35 billion yen ($342 million), three people with knowledge of the deal said.

The purchase by Mitsubishi, Japan's biggest trading firm by net income, will be the largest property transaction since a group of investors bought an office building in Tokyo for about 100 billion yen last August. The price represents a premium of about 13 percent on that paid the last time the building changed hands, four years ago.

The deal for the four-storey building occupied by the New York brand in the centre of one of Tokyo's most fashionable districts comes as hopes grow among real estate operators that retail rents in general are set to rise amid growing interest in opening stores in the city.

As part of his efforts to bring sustained growth to the world's third-biggest economy, Prime Minister Shinzo Abe has promoted monetary, fiscal and structural reforms - dubbed "Abenomics" - that are stoking retail sales, fueling demand for store space in the capital's sprawl of shopping districts.

Mitsubishi, with an array of businesses in finance, machinery, chemicals and energy, is aiming to buy the building from a group comprising Japanese property investor Secured Capital Investment Management, financial services company Orix Corp and Honolulu-based Trinity Investments.

The current owners paid 31 billion yen for the eight-year-old, 7,421 square-meter property in 2010 when the market slowed in the wake of the global financial crisis. Japan's property business began to rebound last year, boosted by Prime Minister Abe's pro-growth economic policies.

Also present on Omotesando are stores operated by the biggest names in the luxury goods business, including LVMH Moet Hennessy Louis Vuitton SA's Bulgari, Celine and Vuitton brands, Kering SA's Gucci and privately owned Chanel.

Both domestic and overseas retailers have ambitions to open stores in primary Tokyo shopping districts like Omotesando and the central Ginza area, said Hajime Shibata, a senior consultant at the Japanese unit of global commercial real estate service firm CBRE.

The Mitsubishi deal will follow the acquisition of another landmark Tokyo retail property, a building housing a Tiffany & Co store in Ginza. It was bought by Masayoshi Son, the billionaire founder of tech and telecoms group Softbank Corp , for 32 billion yen in September.

Shibata said Omotesando remains a draw for retailers because the area attracts fashion-conscious shoppers. While Omotesando offers an array of upscale stores, it's also located close to Harajuku, an area popular with younger buyers of Tokyo's funky street styles.

"The market for retail properties in Tokyo has a positive outlook and we can expect the rents will start increasing," said Shibata.

Low-cost financing will also fuel property deals.

"Investors will remain aggressive this year because they can continue borrowing money cheaply," said Takashi Ishizawa, chief real estate analyst at Mizuho Securities Co.

A Mitsubishi spokeswoman declined to comment on the transaction. Officials for the current owners also declined to comment. Ralph Lauren was not immediately available for comment.

Mitsubishi already has a substantial presence in Japan's property markets with its real estate asset management firm Diamond Realty Management Inc, which operates a private real estate trust. Mitsubishi also has a property joint venture with UBS AG which operates two public real estate trusts.

- Reuters


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
George Vodongo
China to help Kenya fight high le...

China observed that if left unchecked, corruption could see the country degenerate into lawlessness. Read more...

Submitted by
S Mbinya
Signs that he is seeing someone e...

When a man wants to be with you, he will always create time to be with you. Read more...

Submitted by
George Vodongo
Spat between DP Ruto and Boniface...

A close associate of the DP, Hon Njogu Barua made an alarming comment on live TV Tuesday morning. Read more...

Submitted by
Ben Wangui
Matatu driver who drugged, robbed...

The driver of a Nissan matatu who over the weekend drugged and robbed a female passenger in Nairobi has been charged. Read more...

Submitted by
Gabriel Ngallah
Heavy police contingent deployed ...

More police officers were on Monday deployed at Likoni in Mombasa County in a security operation to nab members of the ‘Wakali Kwanza’ and ‘Mtalia’ criminal gangs who have been terrorizing locals in the area. Read more...

Submitted by
Ben Wangui
Man released on Presidential amne...

He was caught taking money from a church offering bag at Ol Jabet Independent Pentecostal Church in Laikipia West on October 23. Read more...