Starhill Global Reit to sell its last Japan property for US$39.2 million

[SINGAPORE] Starhill Global Real Estate Investment Trust (Reit) has divested its commercial property in Tokyo for 6.2 billion yen (US$39.2 million), its manager said on Friday (Oct 9).

The sale price represents a 53.8 per cent premium over the building’s latest valuation of four billion yen, which accounted for 1.2 per cent of the Reit’s asset value and 0.8 per cent of its portfolio net property income.

Following the sale, the Reit will no longer hold any properties in Japan and will wind up its subsidiaries in Japan at the appropriate time, the manager said.

Kemmy Tan, chief executive of the manager, said: “This divestment allows us to unlock value, pare down debt and provide us with greater financial flexibility and capacity to focus on new assets that align with our growth strategy.”

The property, Ebisu Fort, is a seven-storey building located in the Ebisu district in Shibuya-Ward, Tokyo, and has 18,816 square feet of net lettable area for retail and office use.

Net proceeds from the sale will be used to repay yen borrowings, working capital and/or other purposes.

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The Reit’s gearing is set to fall to 34.5 per cent from 35.8 per cent, if net sale proceeds are substantially used to repay yen and Singdollar borrowings.

The manager does not expect any material pro forma financial effects of the divestment on the distribution per unit and net asset value per unit.

Units of the Reit closed flat at S$0.505 on Friday, before the announcement.