Global One Real Estate Investment : GOR Announces Acquisition and Transfer of Properties (Acquisition of THE PEAK SAPPORO and Transfer of Otemachi First Square)
Press Release
24 October 2022
REIT Issuer:
Global One Real Estate Investment Corp.
Securities Code: 8958
Representative: Akio Uchida, Executive Director
Asset Manager:
Global Alliance Realty Co., Ltd.
Representative: Kazunori Yamauchi, President
Contact: Gen Yamazaki
General Manager
REIT Finance Department
Tel: +81-3-3262-1494
GOR Announces Acquisition and Transfer of Properties
(Acquisition of THE PEAK SAPPORO and Transfer of Otemachi First Square)
24 October 2022 – Global One Real Estate Investment Corp. (“GOR”) announces today that Global Alliance Realty Co., Ltd. (“GAR”), the Asset Manager to which GOR entrusts the management of its assets, decided on the acquisition and transfer of the assets (Hereinafter, the acquisition of the property is referred to as the “Acquisition” and the transfer of the property as the “Transfer”; and the Acquisition and the Transfer are collectively referred to as the “Replacement.”) as outlined below.
1. Outline of the Replacement
- Outline of the Acquisition
|
1) |
Type of asset |
: |
Trust beneficial interests in real estate |
|
2) |
Name of building |
: |
THE PEAK SAPPORO |
|
3) |
Location |
: |
Sapporo City, Hokkaido |
|
4) |
Acquisition price |
: |
17,000 million yen (*1) |
|
5) |
Scheduled acquisition date |
: |
7 December 2022 |
|
6) |
Seller |
: |
Fuyo General Lease Co., Ltd. |
|
7) |
Brokerage |
: |
None |
|
8) |
Funds of acquisition |
: Proceeds from the Transfer, borrowings and funds on |
|
|
hand |
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(2) Outline of the Transfer
1) Type of asset
2) Name of building
3) Location
4) Acquisition date
5) Transfer price
6) Book value
7) Gain/Loss on transfer
8) Expected Dates of Transfers
9) Transferee
10) Brokerage
11) Use of proceed
Hereinafter, the above asset for acquisition is referred to as the “Asset Acquired.”
: Trust beneficial interests in the following real estate properties as assets in trust
Land : Ownership (total land area: 3 of the 7 parcels of the total land area)
Building : Sectional ownership and co-ownership of sectional ownership
: Otemachi First Square
: Chiyoda-ku, Tokyo
: 25 December 2003
: Total 27,000 million yen (*1)
1st transfer : 6,750 million yen (equivalent to 25%)
2nd transfer: 8,100 million yen (equivalent to 30%)
3rd transfer : 8,100 million yen (equivalent to 30%)
4th transfer : 2,700 million yen (equivalent to 10%)
5th transfer : 1,350 million yen (equivalent to 5%)
: 23,196 million yen (*2)
: Approximately 3,500 million yen (*3)
: 1st transfer : 6 December 2022 2nd transfer:25 September 2023 3rd transfer: 25 March 2024 4th transfer: 25 September 2024 5th transfer: 23 October 2024
: DAIBIRU Corporation
: Applicable
: Acquisition of the Asset Acquired, etc. The proceed from the second transfer and thereafter will be kept as funds on hand and used for part of the funds for future acquisition or part of the funds for repayment of borrowings.
Hereinafter, the above asset for transfer is referred to as the “Asset Transferred.”
(*1) The acquisition price and transfer price represent the prices described in the purchase agreement, excluding related expenses, settlement amount of property tax and city planning tax, consumption tax and local consumption tax.
(*2) The figure is the book value as of 31 March 2022 and is stated as reference. Book value at the time of the transfer will be different.
(*3) The figure is an estimate as book value at the time of the transfer, details of sale-related expenses, etc. have yet to be determined.
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2. Reason for the Replacement
GOR manages assets with an aim to ensure steady growth of the portfolio properties and stable income from a medium- to long-term perspective, pursuant to the “Investment Policies and Investment Targets” stipulated in the Articles of Incorporation.
The Asset Acquired, one of the two properties held in the pipeline using a bridge scheme, is acquired as trust beneficial interests by exercising the preferential negotiation right in real estate for the close-to-station(five-minute walk from Sapporo Station), recently built (age of building: 1.3 years) and large-sized (total floor area: approx. 3,879 tsubo) property. On the other hand, the Asset Transferred is one of the flagship properties owned since soon after GOR went public. Considering that profitability is unlikely to improve in the future reflecting the current yield trend and an increase in repair expenses in recent years due to its building age exceeding 30 years, we have decided to sell it at a price over the appraisal value to realize a gain on sale of approximately 3.5 billion yen at this advantageous timing for sale on the back of the brisk real estate market. The Transfer will be divided into five transactions for the purpose of leveling returns of gains on sale and distributions, which would occur over a long period of time.
The Replacement was decided considering the possibilities of rejuvenating the average building age by more than 2 years and improving profitability (*), which will lead to contributing to the improvement of the medium- to long-term unitholder value of GOR.
(*) NOI yield (*1): from 4.3% to 4.5%; NOI yield after depreciation (*1): from 3.3% to 3.5%
|
Before the |
The Asset |
The Asset |
After the |
|
|
Replacement |
Acquired |
Transferred |
Replacement |
|
|
Asset Size |
(1) 191,194 |
(1) 17,000 |
(1)23,495 |
(1) 184,699 |
|
(1) Acquisition price |
million yen |
million yen |
million yen |
million yen |
|
(2) Appraisal value |
(2) 218,780 |
(2) 17,100 |
(2) 25,000 |
(2) 210,880 |
|
(*2) |
million yen |
million yen |
million yen |
million yen |
|
Building age (*3) |
18.5 years on |
1.3 years |
30.7 years |
16.4 years on |
|
average |
average |
|||
|
Total leasable area |
11,986 sqm on |
10,440 sqm |
8,130 sqm |
12,196 sqm on |
|
average |
average |
|||
(*1) Asset Acquired: “NOI yield” = “Appraisal NOI”https://news.google.com/”Acquisition price”
“NOI yield after depreciation” = (“Appraisal NOI” – “Annual amount of depreciation calculated using the straight-line method corresponding to the useful life of the Asset Acquired”) / “Acquisition price”
Other assets: “NOI yield” = “Actual NOI for the Period ended March 2022” multiplied by 2 / “Acquisition price”
“NOI yield after depreciation” = (“Actual NOI for the Period ended March 2022” － “Actual depreciation amount for the Period ended March 2022”) multiplied by 2 / “Acquisition price”
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(*2) Calculated based on the appraisal value as of 1 September 2022 for the Asset Acquired, and that as of the end of the Period ended September 2022 for other assets.
(*3) As of 30 September 2022.
Building age for the Asset Transferred is based on the year Otemachi First Square West Tower was built, which covers major part of the floor area subject to GOR’s trust beneficial interests
The key determinant factors of the acquisition of the Asset Acquired include the following. Furthermore, the lessee of the Asset Acquired is deemed to comply with the tenant selection criteria of GOR described in the “Report on Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties” submitted on 29 June 2022.
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District potential
With respect to the office leasing market in Sapporo, the stable supply and demand environment for leasing is expected to continue in the future due to the low vacancy rate, in spite of the upward trend of the vacancy rate nationwide, reflecting solid demand from call center operators and outsourcing businesses, as well as the limited supply of new office buildings.
The surrounding area of the North Exit of Sapporo Station where the Asset Acquired is located is an area in which stable demand for office leasing is expected from companies and call center operators, etc. who highly evaluate the excellent access from Sapporo Station to New Chitose Airport and other main cities of Hokkaido. Furthermore, with a large campus of Hokkaido University located nearby, the development of attractive towns in a green environment is ongoing, offering living close to workplace.
From the viewpoint of office location, the rent level in this area is lower than in the South Exit area of Sapporo Station despite its location being very close to JR Sapporo Station. Therefore, this area can be assessed as a location where a steady rental demand exists. -
Location potential
The Asset Acquired is located a five-minute walk from the North Exit of JR Sapporo Station, or a three-minute walk from Kitajunijo Station of the Namboku Line of the Metro Line with excellent access to New Chitose Airport and other major cities in Hokkaido.
In addition, with the Hokkaido Shinkansen (bullet train) being scheduled to be extended to Sapporo Station at the end of FY 2030, further improvement of convenience in transportation is expected.
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Property specifications
The rental room specifications of the Asset Acquired include a typical rentable floor area of 414 tsubo, effective ceiling height of 2,700 mm, free access floor of 100 mm and the layout is effectively a no-pillar structure. The air conditioning system is individually controllable in 20 zones. It also satisfies the needs for business continuity planning (BCP) by securing a dedicated space for tenants to install emergency power generators. The design of the common space was supervised by Gensler, the world’s largest design company working on a large number of the latest office designs, which successfully represents space differentiated from surrounding buildings. The common space provides worker-friendly spaces such as a lounge for a break or lunch, a rooftop terrace surrounded by greenery and open-structured multipurpose rooms, thereby offering factors of both design and convenience that contribute to the enhanced competitiveness of the property.
Furthermore, the property is equipped with high environmental performance exemplified by LED lighting systems and natural ventilation systems in the entire building. It also matches the regional characteristics and needs of tenants as represented by the structure allowing the expansion of toilet units within the proprietary space in preparation for the requirements of tenants such as call centers, a characteristic specific to Sapporo City, and the establishment of a road-heating system (snow melting device) in the exterior part of the first floor.
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Disclaimer
Global One Real Estate Investment Corporation published this content on 24 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 October 2022 06:49:01 UTC.
Publicnow 2022
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Technical analysis trends GLOBAL ONE REAL ESTATE INVESTMENT CORP.
| Short Term | Mid-Term | Long Term | |
| Trends | Bearish | Neutral | Neutral |
Income Statement Evolution
| Mean consensus | – |
| Number of Analysts | 0 |
| Last Close Price | 105 700,00 |
| Average target price | |
| Spread / Average Target | – |