GE Offloads Japanese Office Assets

TOKYO—In separate transactions, GE Capital Japan has sold a total of 50 office properties here and in other major Japanese cities, according to published reports. PERE reported Thursday that Hong Kong-based investment management firm PAG had acquired a portfolio of 26 properties valued at approximately US$1 billion through its PAG Real Estate Partners fund. Separately, Nikkei Real Estate Market Report said that Ichigo Group Holdings had acquired 24 office assets from GE Capital, in a deal estimated at 50 billion yen, or approximately US$403 million.

PAG partner Roderick Storie, who oversees PREP, said in a statement that the GE office portfolio, concentrated mainly in Tokyo, “sits squarely within the strategy's objectives and provides an attractive income-driven return profile for our investors in one of Asia's more compelling core markets.” The parent company is seeking to raise US$1 billion for PREP, which PERE describes as a pan-Asia core-plus fund.

Thirteen of the 24 mid-sized office properties will be acquired by Ichigo Real Estate Investment Corp., a J-REIT under the Ichigo umbrella. The highest in value, according to the Nikkei Real Estate report, is the eight-story MG Ikenohata Building in Tokyo, valued at about 5.14 billion yen, or approximately US$41 million. Other properties in the portfolio are located in Nagoya, Osaka and Fukuoka.

The sales are part of GE Corp.'s winding-down of its real estate and financial services platforms as it focuses on its core business lines. The bulk of the real estate property and debt businesses were sold to the Blackstone Group and Wells Fargo in deals this past April that are expected to close during the third quarter.