Lone Star, Goldman Bid for Failed Japanese REIT

TOKYO (Reuters) – Lone Star, the Development Bank of Japan and Goldman Sachs Group Inc (GS.N) are among the final bidders for failed Japanese real estate investment trust New City Residence Investment Corp, two people familiar with the transaction said.

The state-owned Development Bank of Japan is teaming up with Mitsubishi Corp (8058.T) and Genkai Capital Management Co to bid in the sale worth about 100 billion yen ($1.1 billion), they said, asking not to be identified as the information is not public.

Oaktree Capital Management and Daiwa Securities SMBC Principal Investments, an investment arm of Daiwa Securities Group (8601.T), are also in the final round, which took place about two weeks ago, they said.

New City Residence filed for court protection from creditors in October with 112 billion yen in debt, becoming Japan’s first real estate investment trust to fold.

Nikko Citigroup Ltd, Citigroup Inc’s (C.N) Japanese investment banking unit, is arranging the sale.

New City Residence owns apartment buildings in Ginza, Harajuku and other up-market areas of Tokyo. The trust was unable to raise funds to repay its debts and finance the purchase of new assets to sustain growth.

($1=91.12 Yen)

By Junko Fujita

(Editing by Michael Watson)