Mitsubishi Estate buys Tokyo buildings from Lone Star

TOKYO (Reuters) – Japan’s Mitsubishi Estate Co (8802.T: Quote, Profile, Research) said it bought two office buildings and a hotel in central Tokyo from U.S. investment fund Lone Star (LS.UL: Quote, Profile, Research) in a deal media reports said was worth $1.1 billion.

The Japanese developer expects premier buildings with quake-resistant construction to continue attracting tenants and yield stable profits despite likely damage to the property market from economic stagnation in the wake of this month’s devastating earthquake and tsunami in northeast Japan.

Mitsubishi Estate purchased the 18-storey west wing and 24-storey east wing of the Kokusai-Shin Akasaka complex and an adjacent hotel on March 14. Total office floor space is roughly 80,000 square meters, Mitsubishi Estate spokesman Ryuichiro Funo said.

Funo declined to give financial details of the deal but the Nikkei business daily reported that the total value was estimated at about 90 billion yen ($1.1 billion).

In 2004, Lone Star bought the Kokusai Shin-Akasaka development and other nearby buildings from Kokusai Motorcars and incorporated them into its real estate fund, the report said.

No comment was immediately available from Lone Star.

Mitsubishi Estate, which also sealed the purchase of a 10-storey office building in Washington, D.C., on March 23, may tear down the Kokusai Shin-Akasaka complex to develop a new project with cutting-edge facilities, the Nikkei report added.

Mitsubishi Estate shares dropped 2.2 percent to 1,389 yen while the broader Nikkei 225 average (.N225: Quote, Profile, Research) lost 0.6 percent. ($1 = 81.325 Japanese Yen)

(Reporting by Mariko Katsumura; Editing by Edmund Klamann)

Mitsubishi Estate buys Tokyo buildings from Lone Star