Blackstone in advanced talks to sell Tokyo Garden Terrace Kioicho office and retail for ¥300 billion
Blackstone is near a ¥300 billion ($1.9 billion) sale of the office and retail portion of Tokyo Garden Terrace Kioicho to Daiwa Securities-linked funds, recouping three-quarters of its ¥400 billion purchase price from February 2025. The deal follows Blackstone's July sale of two hotels in the same c
Blackstone is in advanced talks to sell the office and retail space at Tokyo Garden Terrace Kioicho to funds managed by units of Daiwa Securities for around ¥300 billion ($1.9 billion), according to sources who spoke with Mingtiandi, giving the US fund manager an exit from a complex it bought less than two years ago. The sale includes a Daiwa Securities unit offering about ¥34 billion of the ownership to individual investors as digital securities, according to an account by Bloomberg on Friday.
The office sale comes after Blackstone sold two hotels in the Tokyo Garden Terrace Kioicho complex to Tokyo Century Corp and Seibu Real Estate for an undisclosed amount in July of this year, after buying the entire complex from Seibu Holdings for around ¥400 billion in a deal which closed in February 2025. At around ¥300 billion, the Daiwa deal would match Brookfield's February purchase of the Dentsu headquarters, which CBRE ranks as Japan's biggest property transaction this year.
Completed in 2016 on the site of the former Grand Prince Hotel Akasaka, Tokyo Garden Terrace Kioicho is anchored by Kioi Tower, a 36-storey building with about 110,000 square metres (1.18 million square feet) of total floor area. The fifth to the 28th floors are dedicated to office space with typical floorplates of 3,363 square metres of lettable area above a four-storey podium of shops and restaurants. The 2.4 million square foot (222,967 square metre) development in Chiyoda ward also holds a 250-key hotel, 135 residences, conference and wedding venues and shops, which are not included in the prospective transaction.
Mitsubishi UFJ Trust and Banking will act as trustee for about ¥90 billion of the office space, Nikkei reported. The trust bank filed on Friday to issue ¥34.1 billion of digital securities, with a Daiwa subsidiary underwriting the offering, according to Bloomberg. The complex connects directly to Nagatacho Station and sits two minutes' walk from Akasaka-mitsuke Station on Tokyo Metro, with tenants including the Japanese government's Digital Agency and LY Corp, the operator of Yahoo Japan and the Line messaging app.
Blackstone's ¥400 billion purchase of the complex, which it described at the time as the largest Japanese real estate investment by a foreign investor, was 186.5 per cent above Seibu's book value of ¥139.6 billion. Selling the office and retail space for ¥300 billion would recoup three-quarters of that outlay before counting the hotels or the condominiums, the majority of which have sold, according to Bloomberg.
The deal looms as Tokyo reigns as Asia Pacific's top target city for real estate investors this year, with $15.6 billion in trades of income-earning properties from January through June, according to MSCI. Vacancy for Grade A offices in Tokyo's five central wards fell to 0.3 per cent in the third quarter, down 0.6 percentage points from a year earlier and the lowest level in the data series, according to Cushman & Wakefield. Assumed achievable rents for those buildings rose 18.2 per cent from a year earlier and 4.7 per cent from the second quarter, to the equivalent of $95.55 per square foot per year.
