Shuwa Joins Tishman West in London Real Estate Deal

Shuwa Investments Corp., the giant Japanese real estate company, made its first move into Europe on Friday with a $160-million purchase of a London property in a joint venture with Tishman West Cos.

Tishman Shuwa Victoria Partners acquired a 250-year leasehold for the 195,000-square-foot Ashdown House in London from the Church Commissioners for England and Shell Pensions Trust Ltd. Tishman West, a Los Angeles commercial real estate firm, will manage the building, which is 95% occupied by the Department of Trade and Industry, a British government agency.

The purchase, which also marks the first major investment in England for Tishman, is the latest in a string of Japanese real estate ventures in London. Takaji Kobayashi, president of Shuwa, said about 20 buildings in London are owned or under development by Japanese interests or partnerships.

Looked for 2 Years

Shuwa’s diversification into London fulfills the company’s worldwide corporate strategy of having a presence in Japan, the United States and Europe. Kobayashi explained that London was one of the strongest commercial real estate markets in the world, with a vacancy rate of only 2.5%, compared to an average double-digit rate for the United States.

The Japanese company, which has been looking at London properties for two years, decided to enter the market in a joint venture with Tishman, which had originally sought out the property and purchase alone.

Tishman, which manages some Shuwa properties, including the Arco Plaza and two buildings in Century City, decided to invest in a building after a less than successful three-year try at British property management on behalf of U.S. tenants, according to Perry S. Herst Jr., Tishman chairman and chief executive.

Chance to Expand

“This acquisition gives us the opportunity to expand our base of operations in the European market and enables us to better service our international clients. This is a very strong market,” said Alan D. Levy, president and chief operating officer of Tishman.

Meanwhile, Shuwa, which plans to invest $500 million in Europe over the next two to three years, will open an office in London later this month with some American personnel. Kobayashi said Shuwa is looking at two other buildings in London and is considering a small investment of under $1 million in Paris.