Mori Trust eyeing property purchases at home and abroad
Billionaire developer keen to acquire office towers and 'smart' buildings at home and abroad as he embarks on first big investment for four years
Japanese billionaire Akira Mori plans to buy as much as 100 billion yen (HK$9.4 billion) in properties in Tokyo, New York and London, his company's first investment of this scale since 2008, as local real estate values recover and the yen strengthens.
The owner of Mori Trust, the nation's most profitable closely held developer, wants to buy assets such as office towers and may focus on developing so-called smart buildings that are energy efficient and have disaster-prevention systems in place, he said.
Mori is taking advantage of the yen's strength to explore overseas opportunities for the first time as part of the company's most significant investment since the 76-year-old declared the end of Japan's real estate boom in 2008. Mori Trust, which has refrained from purchasing to focus on strengthening its finances, has boosted its capital ratio to 26.3 per cent as of March from 17.5 per cent in March 2008, the year when global financing evaporated as Lehman Brothers collapsed.
"This is the perfect timing to invest," the chief executive officer and president of the company said in an interview in Tokyo. "We have continued to construct new buildings, but for the acquisition of buildings, our plan would be the first since Lehman went bankrupt."
The Japanese currency has strengthened 35 per cent against the dollar in the past five years and traded at 81.90 yen per dollar today in Tokyo.
Mori Trust manages 67 buildings in Japan, including the Tokyo Shiodome Building in a commercial district near Tokyo Bay, and operated about 30 hotels as of October 1, according to the company's website. The company made 16 billion yen of profit for the year ended March 31, almost double the net income generated by Mori Building, which was run by his older brother, Minoru Mori, who died on March 8 from heart failure.
The office vacancy rate, a measurement of unoccupied office space, has dropped for four straight months in Tokyo to 8.7 per cent in October, after rising to a record high in June, as excess supply decreased, according to Miki Shoji, an office brokerage company.