TOKYO (Reuters) - Tokyo’s Tiffany Building is up for sale with an asking price of at least 25 billion yen ($256.71 million) as owner Asia Pacific Land bets on a recovery in property prices, people with direct knowledge of the process said.
The 10-storey building, which houses the flagship store of jewelers Tiffany & Co (TIF.N), is located in the center of the upmarket Ginza area, one of the most luxurious shopping districts in the world.
Property owners are looking to tap demand from investors betting that Tokyo’s property market has hit the bottom and is set to recover.
The market crashed in the wake of the 2008 global financial crisis, but vacancy rates have been falling since early 2012 and average rents have risen slightly in April and May, according to commercial real estate service firm CBRE.
The Bank of Japan’s aggressive easing and commitment to buy a range of assets has raised hopes for a recovery in Tokyo real estate in recent months.
The property was acquired by Asia Pacific Land (APL) in 2010 after previous owner, a Goldman Sachs (GS.N) property fund, gave up control when loans came due.
The fund bought the office and retail building in 2007 for 38 billion yen ($384 million) from Tiffany at the height of the property boom driven by a boom in leveraged financing. The deal marked a high point of a wave of acquisitions by foreign investors in Japan.
APL could not be immediately reached at its offices in Tokyo, Hong Kong or Taiwan.
APL wants to pay off remaining loans on the property and return a profit. The lenders include two German banks - Aareal Bank AG (ARLG.DE) and Westdeutsche ImmobilienBank WDLGW.UL, according to the people with knowledge of the deal.
In April, Westbrook Partners, a privately owned real estate investment company based in the United States, led the acquisition of a majority stake in a Tokyo office tower for about 30 billion yen ($303 million).
The property, Akasaka Garden City, had been bought by a fund managed by Morgan Stanley (MS.N) in 2006. Like the Tiffany building, the property shifted to lender control when the loans came due.
Reporting by Junko Fujita; Editing by Louise Heavens