TOKYO Oct 1 The billionaire founder of tech and
telecoms group SoftBank Corp bought Tokyo's landmark
Tiffany Building for 32 billion yen ($326 million) in one of the
priciest property deals in recent years in Japan, underscoring
the recovery in the real estate market.
Masayoshi Son, ranked Japan's second-richest man by Forbes,
outbid sovereign wealth funds and Japanese corporations for the
10-storey glass structure in Tokyo's Ginza luxury shopping
district, which was put on sale by Asia Pacific Land, people
with direct knowledge of the transaction said.
The building, in Tokyo's Ginza luxury shopping district,
houses the flagship Japan store of jewellers Tiffany & Co
and was designed by architect Kengo Kuma.
It was not immediately clear why Son had purchased the
building, or how he would finance the deal. SoftBank declined to
comment while Asia Pacific Land could not be reached for
The people close to the deal declined to be identified
because they are not authorised to talk to the media.
The purchase price would yield an estimated capitalisation
rate of 2.6 percent, based on expected future rental income,
well short of the minimum 4 percent that Japan's real estate
investment trusts typically seek.
The capitalisation rate is also reminiscent of the 2 percent
yield on some of the most expensive deals of a property boom in
Japan that peaked in 2006.
"Property funds and real estate trusts need certain returns
so they will stay away from this level of competition," said
Takashi Ishizawa, chief real estate analyst at Mizuho Securities
"I expect future players could be non-property firms who
want to diversify their revenue sources from their core
Asia Pacific Land, a property investment group operating in
China and Japan, had been seeking a buyer for the Tiffany
Building as Japan's property market rebounded in recent months
on Prime Minister Shinzo Abe's reflationary policies.
But with foreign investors also joining the search for
prospective properties, concerns are mounting that a speculative
bubble may be forming in certain parts of the market.
Aareal Bank AG and Westdeutsche ImmobilienBank
had financed Asia Pacific Land's purchase of the
Tiffany Building in 2010.
Son holds a 21.8 percent stake in SoftBank, Japan's
third-biggest company by market capitalisation.
SoftBank has attracted attention for its bold acquisition
strategy, including this year's $21.6 billion purchase of No.3
U.S. wireless carrier Sprint. The company also holds 36.7
percent of Chinese e-commerce company Alibaba Group.