Hankyu REIT property Hotel Gracery Tamachi. (Photo: Hankyu REIT)

Hankyu REIT has reduced the monthly rent at its property known as Hotel Gracery Tamachi by approximately JPY1.44 million, or about 7.4%, effective from 30 September 2013.

The reduction came after a court case which saw the property’s tenant, Fujita Kanko Inc, taking legal action against the REIT.

Fujita Kanko has initially pressed for a 23.5% reduction in rent, although reasons for this demand was not disclosed by the REIT.

Hankyu REIT said that it considers this demand “to lack reasonable grounds” and filed a counterclaim against Fujita Kanko.

The rent reduction of 7.3% was eventually reached after a recommendation by the Tokyo District Court for both parties to settle the legal action privately.

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By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.