Mitsubishi, Blackstone said to compete in US$1.7b bid

Mitsubishi Corp., Kenedix Inc. and Blackstone Group LP have joined Global Logistic Properties in submitting bids for 140 billion yen ($2.08 billion) of properties in Japan, four people familiar with the deal said.

 

The properties held by LaSalle Investment Management Inc., include 24 warehouses in cities such as Tokyo and Osaka, according to the people, who asked not to be identified because the information is not public. The results from the second round of bidding will be released by the end of the week, two of the people said.

 

The sale would be the biggest since Mori Trust Co. paid 231 billion yen for Tokyo’s Toranomon Pastoral Hotel in 2007, and exceed Shinsei Bank Ltd.’s $1.6 billion sale of the Pacific Century Place building in Tokyo in 2009. 

 

The latest bids come almost four months after the March 11 earthquake, Japan’s worst temblor, and as more companies are forecasting increased hiring and investment on anticipation of higher demand this year.

 

“Property prices should be lower after the earthquake,” said Peter Bai Hongwei, a Beijing-based property analyst at China International Capital Corp., adding that investors should look at “specific terms” of the final transaction.

 

Chitomo Suzuki, a spokeswoman at Mitsubishi, the nation’s biggest trading house by sales, couldn’t be immediately reached for a comment at her Tokyo office. Akihiro Nakao, a spokesman at Kenedix, a Japanese property investment company, declined to comment.

 

SHARES RISE

Peter Rose, the New York-based spokesman at Blackstone, the world’s largest private-equity firm, couldn’t be reached in his office after work hours and didn’t immediately respond to an e- mail seeking comment. Hideko Takee, a spokeswoman at LaSalle, the property-fund unit of the world’s second-largest commercial real estate brokerage, also couldn’t be reached for a comment in her Tokyo office.

 

Kenedix shares jumped 5.3% to 15,200 yen at the 3 p.m. close in Tokyo, the highest since May 11, while Mitsubishi increased 1% to 2,047 yen, a one-month high.

 

Global Logistic, an operator of warehouses near seaport hubs and partly owned by Government of Singapore Investment Corp., said today it submitted its bid to buy the LaSalle assets in Japan. The company plans to make the acquisition through a “fund structure” with one or more institutional investors, it said in a Singapore exchange filing.

 

SEEKING NEW TENANTS

The Singapore-based company said on May 30 that it’s on the lookout for acquisitions in Japan as it expects the economy to rebound after the March 11 temblor and anticipates the 46 trillion yen industry will benefit as more companies cut costs and farm out more logistics services. It’s also seeking new tenants in Japan that may move out of older, non-earthquake resistant warehouses to its newer buildings, it said in the statement. The country made up more than 80% of its revenue and pretax earnings in the year ended March, it said.

 

“GLP has a very high operation rate in the Japan market, I’m not surprised they are making the acquisition to increase their growth rather than simply relying on rental,” Bai said.

 

The stock climbed 0.5% to $2.08 in Singapore trading, the highest in almost a month.

 

Global Logistic and Blackstone are in close competition for the 140 billion real estate holdings, the Wall Street Journal reported yesterday.