Japan Residential Assets Manager, the manager (of Saizen Real Estate Investment Trust (Saizen REIT),said associate Godo Kaisha has agreed to acquire of Rise Yotsugibashi (RYB) from an independent party for JPY 428 million ($6.8 million).
RYB is a brand new building built in June. It comprises 49 residential units, three car parking lots and five bicycle lots. RYB is located in the Chuo ward, Kumamoto and is within 2 minutes-walk from the Honjyo Nakadori bus stop and 15 minutes-walk to the tram network which connects to the main railway terminal of Kumamoto city. GK Chogen will have full ownership of the entire building block of RYB and full title of the freehold land.
RYB is currently in the process of being tenanted. It is expected to generate annual revenue and net property income of JPY 36.3 million and JPY 27.5 million respectively, which are equivalent to about 0.9% and 1.1% of Saizen REIT’s annual revenue and net property income in the financial year ended 30 June 2011 (FY2011).
During the period of leasing up, the seller has provided a rental guarantee for 42 residential units, which is equivalent to an occupancy rate of 85%. The rental guarantee for each of these 42 residential units will be valid until the unit is tenanted.
The acquisition and its related costs are expected to be financed with Saizen REIT’s cash resources initially.
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