SINGAPORE (Aug 31): Saizen REIT's is acquiring Strasse Nanokawa from an independent party for JPY513 million ($6 million). Strasse Nanokawa is a residential property comprising 42 residential units and 20 car park lots. It is located in the Minami Ward of Fukuoka and is within 7-minutes' walk from the Nishitetsu Hirao Station. It was built in December 1994.

Saizen is making the acquisition via a Japanese tokumei kumiai (TK) arrangement with GK Chosei, in which Saizen REIT is the TK investor while GK Chosei is the TK operator. A TK Ooperator is a Japanese limited liability company, and such arrangements are a common method of investing and holding real estate in Japan. Upon the completion of the acquisition, GK Chosei will be the sole owner of Strasse Nanokawa and the full title of the freehold land on which it sits.

Strasse Nanokawa is generating annual revenue and net property income of JPY 30.5 million and JPY 21.8 million respectively, which translates to 0.8% of Saizen REIT's annual revenue and net property income for the financial year ended June. It is valued at JPY 470 million by an independent valuer.

The property offers Saizen REIT exposure into Fukuoka, one of Japan's most promising markets. Currently, 39 out of the 42 residential units and five out of 20 car parking lots are occupied. Saizen REIT plans to market the carpark units out for lease to boost occupancy levels. The net property income is about 4.2%, based on 83%-occupancy. With the normalised occupancy of 94%, net property income yield is expected to be about 5%.

Saizen REIT closed 0.6% lower at 81.5 cents.