Will Goldman Sachs Group Inc (NYSE:GS) Be the Ultimate Victor of the Bidding Fight Over the Rights of Pacific Century?

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By dmcIntire on August 14, 2014 Company

Will Goldman Sachs Group Inc (NYSE:GS) Be the Ultimate Victor of the Bidding Fight Over the Rights of Pacific Century?

According to the sources, a unit of Goldman Sachs Group Inc (NYSE:GS), has recently put forward a deal of around 165 billion yen for an office building, known as the Pacific Century, in the region of Tokyo. The deal price comes to a total of $1.6 billion, and sources have it that it can prove to be the biggest property deal made by the company over the last six years.

The seller of the said property is Secured Capital, a part of PAG. PAG bought the company in 2009 for a total of 144 billion yen. The property is a 32 storey high building, located near the railway station of Tokyo.

It is important to note here that the investors and financers are madly acquiring properties as the chances are that the prices will go up in the future in lieu of Prime Minister’s fiscal and monetary growth policies.

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Some other multinational companies, including Angelo Gordon & Co- a New York company- and Orix Corporation- a Japan based company- are also looking for their office sites in Tokyo. The companies have put forward a deal of 40 billion yen.

According to the news, the deal that the unit of Goldman Sachs Group Inc (NYSE:GS), Goldman Sachs Asset Management, put forward is being considered against the two rival bids. The sellers screened the initial bids; and sources have it that Secured Capital will grant the exclusive rights for negotiations of the deal to one final bidder.

The names of the competing bidders have not been released yet. Moreover, Goldman Sachs Group Inc (NYSE:GS) refused to comment on the deal. The spokesperson of Secured Capital was also unavailable to comment.

The bids on the Tokyo office building are reported to be the biggest office site deals in the country of Japan over the last six years. Initially, Secured Capital tried to get bids of 180 billion yen; however, 165 billion yen was the most that it could get.

The office building was constructed in 2001 and it was purchased by K.K. daVinci Holdings for a total of 200 billion yen, during the year 2006 when the property market was at its peak in Japan.

In 2008, when Japan faced global crisis in the real estate industry and K.K. daVinci failed to pay its installment on time, Shinsei Bank Ltd got hold on the rights of the building.

Pacific Century is situated in the Chiyoda ward region of Tokyo where the vacancy rates remain the lowest and the rents are reported to be the highest.

Coming to the stock prices of Goldman Sachs Group Inc (NYSE:GS), the company, on the last trading day, August 13, 2014, opened its stocks at a price of $172.40 and closed at a price of $172.37, after hitting the highest figures of $172.89. The company has a market capitalization of $75.94 billion and a price to earnings ratio of 6.94. As far as the dividend yield of Goldman Sachs Group Inc (NYSE:GS) is concerned, the numbers are reported to be around 1.28 percent.