Jul. 23, 2014
Sumisho Realty Management Co., Ltd.
Establishment of Private REIT (Unlisted Open-end Private-placement Real Estate Investment Trust)
Sumitomo Corporation (head office: Chuo-ku, Tokyo; president: Kuniharu Nakamura) in August 2014 will be establishing SC Realty Private Investment Corporation (name tentative; hereinafter, “SCRP”) through its wholly-owned subsidiary Sumisho Realty Management Co., Ltd. (head office: Chuo-ku, Tokyo; president: Hidetoshi Fujibayashi; hereinafter, “SRM”) with an eye to forming an unlisted open-end private-placement real estate investment trust (“private REIT”).
Since Japan’s first private REIT was created in 2010, the market for such trusts has expanded to meet the needs of investors looking for long-term stable investments, and SRM will be forming this new private REIT with this in mind.
SRM will be putting properties developed/owned by Sumitomo Corporation into a private REIT of about 30 billion yen to be launched in or around January 2015. Office buildings, retail facilities, logistics facilities, residential facilities, hotels and other assets will subsequently be added, with the aim of expanding the scale of this diversified private REIT to 100 billion yen in the first three years and 200 billion yen in the first five years.
This private REIT is the only REIT for which Sumitomo Corporation serves as the main sponsor, and Sumitomo Corporation is seeking to marshal the full capabilities of the Group by, for instance, making maximum use of Sumitomo Corporation’s capability to provide properties and Group companies’ know-how in real-estate administration to achieve sustained long-term growth.
By undertaking this private REIT business, the Sumitomo Corporation Group is hoping to provide investors with new investment opportunities and contribute to further development of the real estate investment market.
Sumitomo Corporation also intends to expand its real estate business by pursuing a non-asset business (Note 1) such as this private REIT in tandem with its conventional on-book business (Note 2).
Sumitomo Corporation started out in the real estate business via its predecessor Osaka Hokko Kaisha Ltd., established in 1919. Utilizing its more than 90 years of experience and know-how as a developer, Sumitomo Corporation is engaged in a broad range of ventures with other Group companies, from real estate planning/development to operation/management.
Sumitomo Corporation’s real estate business covers a full lineup of office buildings, residential, retail facilities and logistics facilities, and its total assets in Japan and overseas are valued at about 450 billion yen (as of the end of FY2013).
Its principal business results are 55 properties (total floor area: approximately 1,055,000 m2) in the building lease business, 22 properties (total floor area: approximately 753,000 m2) in the commercial facility lease business, and about 55,000 condominiums (units supplied, including overseas).
SRM was established in September 2007 to take over from Sumitomo Corporation the management of assets in private-placement real estate funds for foreign and domestic institutional investors. In addition to a fund specializing in logistics facilities set up in February of this year, SRM has also created funds covering office buildings, retail facilities, and residential facilities, with assets of more than 200 billion yen now on deposit.
|[Profile of SCRP]|
|-Official name||SC Realty Private REIT, Inc.|
|-Business category||Unlisted open-end private-placement real estate investment trust|
|-Operating company||Sumisho Realty Management Co., Ltd.|
|-Placement||Limited to qualified institutional investors|
|(office buildings, commercial facilities, logistics facilities, residential facilities, and hotels)|
|-Initial investment scale||Approx. 30 billion yen (tentative)|
|-Investment corporation establishment||August 2014 (tentative)|
|-Start of operation||January 2015 (tentative)|
(Note 1) Business that uses funds solicited from outside to invest in but not hold real estate (existing or under development) for the purpose of earning commission revenue
(Note 2) Business that earns rental revenue and capital gains by holding assets and independently assuming investment risk itself
Corporate Communications Department,