JAPAN Trends and Developments Contributed by: Hiroshi Niinomi, Koki Hara, Naoto Yamamoto and Serina Nakano, Nishimura & Asahi (Gaikokuho Kyodo Jigyo)
ships ( tokumei kumiai or TK interests)), which gener - ally require written documents with a certified date in order to be transferred and perfected, a beneficial interest in the trust can be transferred and perfected by agreement between the parties without a docu - ment with a certified date. This is because the transfer of a beneficial interest of the trust can be perfected by an entry or record in the beneficial interest register if the trust deed indicates that no beneficiary certificate has been issued. This beneficial interest registry may therefore be directly linked with a blockchain and nothing other than the registration will be required to complete a transfer (including perfection). Furthermore, under the Industrial Competitiveness Enhancement Act (which was amended on 16 June 2021), a transfer of TK interests may be perfected against the debtor and third parties if a notice or con - sent to the transfer is provided by a certified busi - ness operator using information systems with certain features. One of the upcoming issues for STOs is the devel - opment of secondary markets. There are discus - sions and legislative efforts to relax the regulation on proprietary trading system (PTS) operators dealing with non-listed securities. In these circumstances, on 15 December 2023, Osaka Digital Exchange Co Ltd began trading on the PTS “START,” Japan’s first secondary market for security tokens. As of February 2026, seven real estate-backed security tokens were already being traded. Redevelopment Projects Urban redevelopment projects A large number of redevelopment projects have been undertaken in metropolitan areas in line with the Urban Redevelopment Act (the “Act”), including large-scale redevelopment projects in major metropolitan areas in Tokyo. The purpose of the Act is to promote greater urban land use and facilitate the renewal of urban functions. The Act has the unique features of: • enabling the participation of developers who are development professionals; and
• covering project costs by selling the rights in sur - plus portions obtained from the redevelopment or allocating these rights to developers who do not have rights to the property before redevelopment. Without the Act, it would be difficult to proceed with redevelopment projects due to the challenge of align - ing the interests of various rights-holders to small- scale land and buildings in project areas while also covering project costs. Although individuals, redevel - opment associations and local governments can be entities that carry out urban redevelopment projects, redevelopment associations are used in many cases, and the procedures generally involve: • an urban planning decision; • preparation and approval of a project plan; and • rights conversion, which is the main procedure for redevelopment projects and involves converting existing rights in existing real property into rights in In recent years, as the total development costs of large-scale redevelopment projects have increased, there has been a trend towards an increasing number of projects that not only involve the participation of professional contractors or developers but also use a real estate securitisation structure, such as a TK-GK structure or TMK structure, in order to finance part of the project costs. There are several ways a special purpose vehicle (SPV) can be involved in a redevelop - ment project, including becoming a participant in a redevelopment association or acquiring surplus floor space after redevelopment. newly redeveloped real property. Use of special-purpose vehicles In this case, the difficulty is heightened because knowledge of both real estate liquidation schemes and redevelopment projects is required. TK-GK and TMK structures are regulated by the FIEA or the Asset Securitisation Act, respectively, neither of which is directly related to development-related laws and regulations. For example, at the time of approval of a business plan, the authorities may require that a SPV submit a letter of support from a sponsor attesting to the SPV’s credibility to remain involved in the project for a long period of time.
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