On 7 July 2015, Japan Residential Investment Company acquired Minamisuna 7 Chome Building, a seven story apartment complex located in Koto Ward, Tokyo. The purchase price was Yen488m (£2.5m), excluding tax and other acquisition costs, and has an estimated prospective net operating yield of 4.7%. The property was purchased at a 2.4% discount to a recent externally appraised value of Yen500m (£2.6m).
The Property is newly constructed completed in November 2014, has 539 square meters of net leasable area, and currently is 95.8% occupied. In addition to 14 residential units, the Property has one retail unit tenanted by Seven Eleven Japan. Built in 2014, the Property fronts Minamisuna Sanchome Park and is in close proximity to schools, shopping, and other lifestyle amenities. The Property is a 3-minute walk from Minamisunamachi Station, on the Tokyo Metro Tozai subway line.
In conjunction with this acquisition, the Fund today obtained additional debt financing in the amount of Yen318m (£1.7m). This loan has been extended by licensed lending businesses in Japan that are affiliates of U.S.-based Prudential Financial, Inc. (NYSE: PRU). The debt has a fixed interest rate of 1.25% per annum, a loan-to-value (“LTV”) ratio of 63.6%, and a remaining tenor of 5 years and 8 months.
With this acquisition and this new financing, the Fund will have an aggregate LTV ratio of 57.6%. Gearing (calculated as net debt as a proportion of total assets less cash and restricted reserves) will be approximately 50.7%. The weighted average interest rate of the Fund will be 0.87% and the average maturity on loans outstanding is 3.4 years.
JRIC : Japan Residential adds new property