RISA Real Estate Investment 100 Billion Yen Goal (Nikkei Financial News)

Jan 17th, 2005

Bids to support Daiei this term

Real estate investor RISA Partners (8924) is materializing collaborative investments with US investor George Soros fund. Year 2005 December term plans on 100 billion yen investment. Through its relationship with the Soros fund, RISA is also participating in the KIACON Co., Ltd team that recently put in a bid to support Daiei. We asked RISA president Atsushi Imuta for more details.

- How is your collaborative investment with the Soros Real Estate Investors towards Japanese real estate developing?
“Taking the occasion of a building acquisition near JR-line Shinjuku station for 8.5 billion last September, we closed the contracts for about 30 billion total over 4 properties. We are on track with our plans and continue to aim for 100 billion investment this year. The already-financed collaborative investment bracket is 100 billion, but once we exceed it, we are contracted to receive more.”

- The real estate acquisition competition is tough. Can you actually buy 100 billion yen worth?

“Thanks to our alliance with Soros, we are now getting invited to bid in the 50 ~ 100 billion yen class. Though we lost the bid, we also participated in bids for foreign automobile firm and Daikyo Inc. Real estate sales related to banks’ NPL disposals continue to be strong. Our strength is that our capital has the flexibility to buy actual real estate properties and real estate-related business shares.”

- How does the collaborative investment contribute to the company profit?

“We receive operating fee in connection with the investment accumulation. In the future sales for properties, dividends from collaborative capital contribution (Soros 80%, RISA 16%, president Imuta 4%) will be distributed.

- What is your role in the consortium centralized around KIACON to support Daiei?

“The same Soros group is contributing capital towards KIACON; hence we were invited to the consortium. The president of KIACON, Mr. Takashi Sawada, who has an extensive experience in distribution industry via UNIQLO is handling retail at Daiei. RISA will handle the real estate. We play the central role in scenario planning of real estate portions such as handling of closed shops and usage of area not in use due to downsizing.”

- If you were selected to be the sponsor, how would it affect RISA’s profitability?

“We will contribute capital towards Daiei partially from the collaborative investment bracket with Soros. RISA will receive operating fee on the investment balance, similar to actual real estate. If Daiei recovers its business, the share price will rise and we will profit from it. There probably are business opportunities related to real estate, but that remains to be seen.”