JAPAN Trends and Developments Contributed by: Hiroshi Niinomi, Koki Hara, Naoto Yamamoto and Serina Nakano, Nishimura & Asahi (Gaikokuho Kyodo Jigyo)
Nishimura & Asahi (Gaikokuho Kyodo Jigyo)
Otemon Tower 1-1-2 Otemachi Chiyoda-ku Tokyo 100-8124 Japan
Tel: +81 3 6250 6200 Fax: +81 3 6250 7200 Email: info@nishimura.com Web: www.nishimura.com
Takeovers Takeovers of J-REITs, including hostile takeovers, are among the key trends in the current REIT market. There were some M&A transactions between J-REITs before 2019. However, they were all friendly mergers conducted through agreements between all relevant parties (including the sponsors). Many were carried out between J-REITs under the same sponsors or affiliated sponsors in an effort to increase their assets under management (AUM), expand the types of their assets and/or streamline their business. The first REIT M&A transaction where the consent from the board of the target REIT had not been obtained was completed in 2020. A minor shareholder called a shareholders’ meeting of the target REIT with the financial bureau’s permission. At the shareholder’s meeting, the existing management agreement was terminated, a new officer nominated by the minor shareholder was selected and a management agree - ment with a new sponsor was executed. After the meeting, a merger was conducted with a REIT man - aged by the new sponsor. Another transaction without board consent was a bid to take over the listed office J-REIT’s shares, which resulted in the REIT’s delisting through a counterbid and the squeeze-out of minority shareholders by its sponsor. A REIT has relatively limited defensive meas - ures against a hostile takeover bid compared with a company incorporated under the Companies Act. For example, “poison pills” and specially designed shares
REITs REIT market overview
The REIT market has generally shown steady growth. As of the end of 2025, the total value of real estate held by REITs, including private REITs, had reached approximately JPY31.7 trillion (on the basis of acqui - sition price) and the aggregate market capitalisation of listed J-REITs was approximately JPY17.4 trillion. The growth of private REITs has played a role in the Japanese REIT market, with private REITs holding properties valued at about JPY7.6 trillion (based on acquisition price) in December 2025. As of the end of 2025, there were 61 private REITs, ranging from diversified REITs (ie, those diversifying their portfolio in multiple asset types) to sector-specific REITs (eg, focused on residential, hotel, or logistic properties). Sponsors from various business fields have initiated private REITs. Railroad companies, electric power and gas companies, financial institutions (including insurance companies and banks) and other industries are also engaging in the management of REITs or are interested in doing so. In August 2025, a J-REIT was listed for the first time in approximately four years since June 2021. The market value of listed J-REITs has softened and the ratio of REIT market price to REIT net asset value is below 1.0 in many J-REITs. In this environment, J-REITs have been acquiring their own shares more frequently to enhance capital efficiency.
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