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Morgan Stanley buys Citigroup Japan headquarters

As the bank seeks to raise funds after its subprime hit, Morgan Stanley Real Estate has snatched its Japan headquarters for a reported $445 million.

Citigroup, the US bank which revealed last month a record quarterly loss resulting from the downturn in the US housing market, has sold its Japan headquarters to Morgan Stanley Real Estate for a reported 48 billion yen ($445 million, €302 million).

In a statement released on Tuesday, Citigroup said that it had completed the sale-and-lease back deal of the Citigroup Center in Tokyo’s Shinagawa district. It said the sale was part of its larger effort to cut the risk of holding property assets. The acquisition price was not disclosed, but the Nikkei business daily was reporting the price as being 48 billion yen.

Morgan Stanley Real Estate has been active in Japan recently, as the economic recovery has been driving up rents and pushing down vacancies. In October it formed a real estate partnership with Japanese beer maker Sapporo, launching the effort with the investment bank’s purchase of a 15 percent stake in the crown jewel in Sapporo’s property holdings, commercial facility Yebisu Garden Place, for $437 million (€302 million). In April Morgan Stanley acquired 13 hotels and two property-management units from Japanese airline All Nippon Airways for $2.4 billion. This month it sold the Westin Tokyo hotel, which it acquired in 2004 from Sapporo for about $435 million, to the Government of Singapore Investment Corporation for a reported 77 billion yen ($716 million).