Repositioning of Symbolic Office Building in Osaka

Osaka-Midosuji Building:”Former Osaka Itochu Building”

Samurai Capital has acquired “Osaka Midosuji Building” through the Forum Asian Reality Income III fund. Applying multiple asset management strategies, the property was valued at more than three times its purchase price at sale.

Property Overview

Built in 1969, on land leased by Osaka’s symbolic temple, South Mido Namba Betsuin.

The building had been used as the Osaka HQ of Itochu Corp. and has been well known as “Osaka Itochu Building”

Located on Osaka’s main streets, Midosuji and Chuo Oodori, directly connected to Honmachi station (Midosuji-line, Chuo-line, and Yotsubashi-line)

Over 28,706sqm lettable area/standard floor plate of approx. 2,000sqm

Deal Overview

The building’s previous owner acquired it in 2007, defaulted, and the asset came under administration by lenders. Samurai acquired the building in Jun.2015 for a reasonable price through a semi-exclusive process

Through asset management strategies including leasing, negotiation of ground lease conditions, cost cutting, renovation, and acquisition of optimal financing, Samurai maximized the asset’s value

Returned occupancy to 100% after Itochu Corp.’s vacated the asset under previous owner

Increased average rent by >15% through rent negotiations

Reduced costs, including building management, utilities, and cleaning costs

Made major repairs, including removing asbestos

Converted a previously closed basement area into a large conference center

Extended the ground lease contract upon expiration for 30 years without renewal fee

Refinanced the asset during management period, greatly improving borrowing conditions

Sold the property in Dec.2017 at more than three times acquisition price to a Japanese developer with plans for long-term holding and possible future redevelopment. The project’s IRR exceeds 70%

Deal Overview

Land: 7,942㎡

GFA: 74,875㎡ (incl. north and south wings)

NRA: 28,706

Built: 1969

Structure: SRC B4/13F

Access: 0 min. to Honmachi station (Midosuji, Chuo, and Yotsubashi lines)