Goldman Sachs a final bidder for $1.6 billion Tokyo building: sources


TOKYO (Reuters) – A Goldman Sachs Group Inc unit is a final bidder for a Tokyo office tower in a deal that could fetch about 165 billion yen ($1.6 billion), said people familiar with the deal, which could be the biggest office property deal in six years.

Secured Capital, part of Asian private equity firm PAG, is trying to sell the 32-storey Pacific Century Place Marunouchi, in a prime spot near the Tokyo railway station. It bought the property for about 144 billion yen in 2009.

Investors are aggressively seeking properties as Tokyo prices are expected to continue a rebound they have seen under Prime Minister Shinzo Abe’s growth policies of massive monetary and fiscal stimulus.

Among other recent deals, Japan’s Orix Corp and New York investors Angelo Gordon & Co are seeking around 40 billion yen for their stake in a Tokyo office building.

Goldman Sachs Asset Management is competing against at least two other investors with similar bids, said the people with knowledge of the deal. The investors were screened in an initial bid and the sellers will award one of the final bidders exclusive rights to negotiate the deal.

The other bidders could not immediately be confirmed.

A Goldman Sachs spokeswoman declined to comment. Officials at Secured Capital could not be reached for comment.

The bids represent the biggest deal for an office property in Japan since the global crisis of 2008, even though it looks set to fall short of the 180 billion yen that Secured Capital initially sought.

Pacific Century Place Marunouchi, completed in 2001, was bought by K.K. daVinci Holdings in 2006 for 200 billion yen at a market peak.

Shinsei Bank Ltd extended loans for the highly leveraged transaction and took control of the property when daVinci became unable to repay on time after Japan’s real estate market crashed in the global financial crisis.

Pacific Century is located in Tokyo’s Chiyoda ward, where rents are the highest and vacancy rates remain the lowest in Tokyo.

(1 US dollar = 102.4600 Japanese yen)