Konnichiwa – Trinity moves into Japan

TRINITY has entered into the Japanese property market with a small investment in an apartment building in Tokyo.

The initial investment involves the purchase of the Clarte Musashi Koganei Residence for $17 million. The asset is a 13-level residential apartment building located in Tokyo’s western suburbs, including 96 apartments which are currently fully leased. The property, which was constructed in 2005, includes a net lettable area of 2,275 sqm over a site area of 520 sqm.

The property is expected to yield 5%.

The investment has been made by a wholly-owned subsidiary in a Tokumei Kumiai agreement with a local Japanese TK operator, which has been established to own and manage investment property in Japan.

Trinity’s chief executive Ben McCarthy said the investment represents a relatively low deployment for the group, involving a capital outlay of $4.5 million, with the balance being non-recourse debt funded arranged locally by the TK operator.

“The asset represents a small initial investment in Japan as we investigate the establishment of a Trinity-managed structure that would potentially own and manage Japanese commercial and residential assets.

“Our strategy involves taking a low exposure to the Japanese market while we are in the early stages of investigation,” McCarthy said.

McCarthy said Trinity is investigating the opportunity with a local Japanese property identity, Yasuhiro Ogita, who is a long-standing colleague of Don O’Rorke, managing director of Consolidated Properties, Trinity’s wholly-owned development subsidiary.

“Our potential future involvement in Japan will align with our core property strategy that acknowledges local presence and experience is essential in developing a sound, diversified portfolio.

“We do not forecast a rapid expansion into offshore markets. This is a measured first step, based on a 20-year relationship that will take us from novice to informed investor as we monitor the Japanese market,” he added.

Australian Property Journal