CCMP Capital and Japanese private equity firm Unison Capital are reportedly in talks to buy Tokyo-based development company, Daito Trust Corporation.
According to Reuters sources, CCMP has joined a consortium led by Unison to acquire Daito, following the decision by New York-based Aetos Capital and Japanese investor Mori Trust to reduce the size of their commitment to the deal. CCMP and Unison declined to comment to PERE.
In a statement Daito refused to speculate on the reports other than to say they were not based on an official announcement or interview. The development company, it went on to say, was considering its “capital policy” but no decisions had been reached.
Reuters said Unison and other private equity firms were seeking a majority holding in the apartment builder, which has a market value of around $5.2 billion (€3.7 billion).
Developers in Japan are facing a difficult time getting credit, forcing a number into bankruptcy. In August, real estate developer Urban Corp., a widely recognized name, filed for bankruptcy with debt of ¥255.8 billion ($2.31 billion; €1.56 billion), making it the largest bankruptcy among listed companies in Japan this year. According to Tokyo Shoko Research, 60 Japanese property companies went bust this July, more than double the 27 that declared bankruptcy in July of 2007.
And the second quarter marked the fourth straight quarterly decline for lending to Japan’s real estate industry, according to the Bank of Japan. Some of the larger property firms in Japan to declare bankruptcy last month included Tokyo-based condominium builder Zephyr and construction company Tada.
The news comes as Germany’s biggest property fund manager, DekaBank, said in a separate interview with Reuters that it was prepared to pour more money into Japanese real estate and was not concerned much about growing signs of a downturn in the country’s property market.
Deka board member Matthias Danne, who runs the bank’s global real estate investment business, said: “We are interested in what’s going on there and we would be prepared to invest in interesting opportunities.” The company, the asset management arm of Germany’s savings banks, has already spent €256 million this year to buy three buildings in Japan.
New York-based CCMP was formed in 2006, in a spin-off from JP Morgan’s private equity arm, JP Morgan Partners.