The deal involves Daibiru purchasing the office block at 135 King Street from Investa Commercial Property Fund, with Investa remaining as investment and property manager, according to the Australian.ย
The A-grade building includes a retail complex housing H&M and is situated in a prime location facing Pitt Street Mall.
The transaction reflects the ongoing confidence Japanese investors have in the Australian market, with the property trading on a yield of approximately 6 per cent.
Daibiru said the building’s strategic location and accessibility as key factors in their decision,” Daibiru told the Australian.
“This unique environment has established the property as a top-tier corporate and retail destination.
Additionally, the property boasts excellent accessibility, located within a five-minute walk to major transportation hubs, including the Sydney Metro, light rail, and train lines
This purchase is not Daibiru’s first foray into the Australian market.
The company has been active since 2018 when it acquired the development project at 275 George Street in Sydney.
In 2023, it expanded into Melbourne and is currently developing an office building in partnership with listed group Mirvac.
The deal follows other significant Japanese investments in Australian real estate*, including investment firm MEC Global Partners Asia taking a stake in the $2 billion Salesforce Tower in Sydney.
These transactions are seen as positive indicators for premium office values as the market shows signs of recovery.
Japanese companies have expanded their Australian property interests beyond offices, forming capital partnerships with major property companies in sectors ranging from logistics to built-to-rent developments.
Their advantage comes from their ability to access low-cost capital in Japan while investing at higher yields in Australia.
Knight Frank’s Ben Schubert, Paul Roberts and Jonathan Vaughan, along with JLL’s Luke Billiau, James Barber and Kate Low, handled the King Street tower transaction.
*The recent two-year ban on foreign purchases of established dwellings in Australia, effective from 1 April 2025 to 31 March 2027, applies specifically to residential properties and does not extend to commercial real estate. Foreign investors can still acquire commercial properties, though such acquisitions may require approval from the Foreign Investment Review Board (FIRB), depending on the nature and value of the investment.
