Another Move of DDI Japan: the First Acquired Dwelling Project at “Nouninbashi Osaka”
Guidance: Since taking moves to successfully acquire several commercial projects in Japan, like Ginza, it has been the first time for DDI Japan to acquire a dwelling project – Project at Nouninbashi Osaka.
On May 29, 2018, DDI Japan formally completed its acquisition of the first dwelling project. Currently, DDI Japan is planning to build the product systems for its own brands in Japan so as to develop the residential investment product line while investing the office building projects. This acquisition also marks that DDI Japan has officially stepped into the real estate market of Osaka following that of Tokyo.
The Project at Nouninbashi Osaka is a newly constructed dwelling project with convenient traffic, located at 3-1-10, Nouninbashi, Chuo-ku, Osaka-shi, Osaka. With a floor space of 207.07 m2 and a gross floor area of 1,462.97 m2, the project has 14 over-ground layers made of reinforced concrete and 12 apartments in total, which was completed in March 2018.
Picture 1 Façade of the Project at Nouninbashi Osaka
Picture 2 WANG Wenyan, General Manager of DDI Japan, Signed the Sales Contract with the Joint-stock BRAVE
Picture 3 Group Photo of BRAVE Representatives with DDI Japan Team
When acquiring this project, DDI Japan has signed a cooperation agreement with TAKUTO Holdings Co. Ltd., enabling the latter to be one of DDI Japan’s strategic business partners.
The joint-stock TAKUTO Holdings is an all-round real estate group integrating real estate development, management, intermediary service and life service, etc., which was established at Osaka, Japan in February, 1998. Its sales volume in recent six years has constantly increased, and the total investment management covers around 25,000 properties including B&B, with the transaction volume of nearly 13,000 with the real estate agency. TAKUTO Holdings possesses rich experience in development and operation of the real estate in Osaka.
After the completion of such acquisition, DDI Japan hands over the project as the B&B to TAKUTO Holdings for operation, so as to guarantee the stable income of held projects for DDI Japan. Both parties have signed a long-term lease contract when the project was being acquired. Through calculation, the annual rent return rate for this project is around 6.5%, and during the holding period of this project, the annual return rate of DDI Japan’s self-owned funds will reach 14%. DDI Japan plans to sell the project at a proper time after it realizes its stable operation, so as to achieve a higher return rate in a short term. According to the planned sales scheme, the annual yield of the aforesaid self-owned funds is expected to reach over 25% after the sale is fulfilled.
Picture 5 Mr. YING Honghe, Head of Investment Department of DDI Japan, and TAKUTO
Holdings Signed the Long-term Lease Contract
It has been the first time for DDI Japan to independently acquire a dwelling project in its own name, which was led by the company and simultaneously that DDI Japan has been quite certified to be in good standing by the mainstream financial community in Japan, and this lays a solid foundation for future investment and financing of the projects. Although facing many strong domestic competitors in the acquisition process, DDI Japan has still, relying on the strength of its teams, developed its own advantages to respond to the challenges and successfully complete the transaction.
This acquisition will boost the diversity of DDI Jaapproved by Japan’s Resona Bank and SHINHAN Bank Japan (SBJ) for financing with a fundraising proportion of over 70%, showing pan’s investment orientations, further reinforce its adaptability to changes of portfolios, guarantee the company’s constant and stable growth, and expand the development territory of DongDu International (DDI).
Established by DDI in February, 2017, the joint-stock DDI Japan is the DDI’s overseas subsidiary located in Tokyo, Japan, with the address of「DDI, VORT at Ginza, Ginza-itchome Tokyo-tu. Since the setup, DDI Japan has rapidly completed the acquisition, segmentation, sales, and investments of the projects at Hirakawachō, Ebisu, Ginza and other places of Tokyo for cash, through the cooperation with Vortex; moreover, it has also developed the new cooperation pattern with TAKUTO Holdings to successfully step into Japanese residential market and further expand the investment directions. Now, DDI Japan is exploring the operating mode to raise the capital through funds and in other ways, so as to guarantee the company’s stable and constant growth while striving for higher returns from the projects, expanding the asset scale, and accelerating the DDI’s process of globalized business development.