East Japan Railway has purchased from Goldman Sachs Group several floors in an office building connected directly to Tokyo Station, part of its push to strengthen businesses other than its core train operations.
The railway company bought the 14th to 18th floors of the GranTokyo South Tower office building at a price of more than ¥50 billion ($337 million) from Goldman, according to several people familiar with the matter. The U.S. bank had purchased this property from Mitsubishi Estate in March 2015, and the latest transaction between Goldman and JR East took place on June 30, registry records show.
The Tokyo-based company’s move underscores business changes that corporate Japan is having to make as the nation’s population shrinks and the portion of the elderly rises ever higher. It’s pressuring companies to shift their focus to businesses that weren’t their mainstay but have profit potential in Japan’s era of fewer consumers.
JR East considers real estate as one of its pillar businesses to offset declining income from its key railway operations. It has set a target of managing ¥1 trillion in assets by the fiscal year starting April 2031 from ¥360 billion in the 12 months that ended in March. To achieve this goal, the company is highly likely to continue acquiring prime real estate near major train stations.
A spokesperson for Goldman Sachs declined to comment, while spokespeople for JR East weren’t immediately available for comment.
GranTokyo South Tower is a 42-story skyscraper completed in 2007.
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