LaSalle buys office building in Shinjuku; SC Capital acquires 206-room hotel

Real estate investment managers, LaSalle Investment Management from the US and Singapore's SC Capital Partners Group, have each deepened their presence in Japan with asset acquisitions in the office and hospitality sectors, respectively.

In separate announcements in early July, the firms said the acquisitions in Shinjuku, central Tokyo, were made on behalf of their investment funds. Both firms did not disclose the financial terms of the deals including the transaction prices.

Office investment amid supply scarcity

LaSalle purchased a 14-storey office building — named Zenith Minami Shinjuku — with about 6,056 sq m (65,187 sq ft) of net rentable area, in an off-market transaction via its Asia Pacific (Apac) opportunistic real estate fund, LaSalle Asia Opportunity VI, from Hines.

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Completed in November 2023, the property is fully occupied by a diverse mix of tenants across healthcare, technology, logistics, F&B, renewable energy, and professional services.

It is situated in Shinjuku — "one of Tokyo's most supply-constrained and high-growth office submarkets", said the Chicago-based firm, a subsidiary of JLL, in a July 6 release.

The premium office asset has efficient 373 sq m floor plates, full-height windows on both the north and south facades, and panoramic views over the landmark Shinjuku Gyoen National Garden. In terms of connectivity, it is a three-minute walk from JR Yoyogi Station and within walking distance of Shinjuku Station.

It was also awarded two certificates — Rank A for New Construction and Rank S for Real Estate — under Japan's premier green building certification system, CASBEE.

These high-quality specifications and the prime location position Zenith Minami Shinjuku well to benefit from the continued growth of Tokyo’s office market, in LaSalle’s view.

Steve Hyung Kim, head and chief investment officer of Apac at LaSalle, said the acquisition exemplifies the firm’s opportunistic strategy of “creatively sourcing deals where in-place rents sit considerably below market”.

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"The investment offers a clear path to mark-to-market rental reversion while remaining favourably positioned in a reflationary environment," he added.

The seller, Hines, said on July 8 that the property had only been about 20% leased when it was initially acquired in late 2023. Hines added that it achieved full occupancy for the building, before the latest sale to LaSalle, through a focused leasing strategy and active asset management.

Planned 'comprehensive' upgrade of hotel

Meanwhile, SC Capital — an Apac-focused, Singapore-headquartered fund manager that is 40%-owned by CapitaLand Investment — has scooped up a 206-room hospitality asset on behalf of its Japan Hospitality Fund.

It plans to undertake a "comprehensive" asset enhancement programme for the ageing hotel, built nearly two decades ago, according to a July 8 release.

The aim is to better align the property with Shinjuku’s growing inbound traveller base, improve the guest experience, and strengthen its long-term competitive positioning.

The hotel is the former Citadines Central Shinjuku, which CapitaLand Ascott Trust (Clas) had sold in late 2025 to Mizuho Leasing for JPY 25 billion ($222.7 million).

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Built in 2018, the property had been acquired by Clas in 2014 and was never refurbished.

Shinjuku, as one of Tokyo’s most dynamic commercial, retail and entertainment districts, attracts both domestic and international leisure travellers as well as strong corporate demand.

Moreover, the asset’s scale sets it apart from other properties in the surrounding area, which are mostly smaller and limited-service hotels, according to SC Capital.

The firm added that Tokyo's hospitality market continues to benefit from strong inbound tourism growth and resilient domestic travel demand.

New hotel supply is also constrained, given rising construction costs, labour shortages and higher financing costs, which creates favourable long-term fundamentals.

"Opportunities of this nature require deep local market knowledge, hospitality expertise and the ability to execute complex repositioning strategies," said Suchad Chiaranussati, chairman and founder of SC Capital.

The firm has invested over US$1.3 billion in Japan’s hospitality sector since 2010 through its private funds strategies, spanning 60 hotels and about 13,000 rooms. SC Capital is also the majority owner of Japan Hotel Reit's asset manager.

CapitaLand Investment completed the 40% initial stake purchase in SC Capital last March, and is expected to acquire the remaining stakes in the fund manager in phases to attain full ownership by 2030.