Singaporean firm Thakral focusing on Osaka for property investment

©Kyodo News

Singaporean property investment group Thakral Corp. is gearing up to expand its real estate portfolio in Osaka as it anticipates high investment yields on the back of an upcoming series of events in Japan's second-largest metropolis.

The company has bought the 10-story Nikke Yotsubashi Building in the central business district of the city for an undisclosed sum, increasing its investment properties to 11 in Japan, all in Osaka, it said Monday.

The move is "in line with our group's overall strategy of achieving sustainable growth over the long term," Thakral CEO Inderbethal Singh Thakral told NNA on Tuesday.

The latest acquired property via investment vehicle subsidiary TJP Pte. Ltd. is a minute walk from Yotsubashi Station on the Osaka Metro and boasts a current occupancy rate of 95 percent, according to a statement.

The Singapore-listed lifestyle products distributor and investment group is stepping up to acquire real estate in the gateway city for western Japan.

Last October, it purchased a hotel and two office buildings in the heart of the city for 5.46 billion yen ($50.5 million) and subsequently another three office properties later in the year, according to the company.

The company has acquired eight commercial and office buildings as well as three hotels to date in Osaka.

The Singapore group focuses on Australia, Japan and Singapore for its investment business.

"The investment is part of our broader strategy to ride on the growing tenant demand in Osaka as the region has the highest occupancy rate owing to strong demand from visitors as well as a limited volume of office supply," the Thakral CEO said in a statement last December.

Osaka is one of the cities hosting games for the Rugby World Cup starting from late September. The city is also scheduled to host the 2025 Expo while trying to draw the first casino in the country.

In addition to an increasing inflow of foreign travelers in Japan, "a strong leasing market has also underpinned the robust demand for property as rents are expected to rise by 7.5 percent this year" in the country, it said in the statement.

Among Singapore firms, Hotel Properties Ltd. said in March this year it will invest 20.85 billion yen in hotel and condominium complex developments in central Osaka as joint projects with developer Tokyo Tatemono Co.

Ascendas Hospitality Trust, a hotel investment fund and a group arm of the government-backed CapitaLand Ltd., bought three hotels in Osaka for 10.29 billion yen in June last year. Ascendas tapped property investment in Osaka through the purchase of a hotel in 2014.

In 2018, real estate investment in Japan from abroad plunged 61 percent from a year earlier to $4.88 billion due to a lack of large deals, according to a report released in May by property consulting firm CBRE.

But capital inflows into Osaka surged by 2.3-fold on the year, driven by investments from Singapore accounting for 18 percent of the total, the largest source among Asian nations, the report said. (NNA/Kyodo)