Japan to prop up its REITs

Reports today say the Japanese government, real estate firms, and banks are acting together to establish a fund of up to ¥500 billion to shore up the country’s battered REIT sector by acquiring bonds issued by them.

Japan has devised a way to prop up its beleaguered REIT market, according to reports today.

The daily Yomiuri newspaper says say the Japanese government, large real estate firms, and major banks are acting together to establish a fund up to ¥500 billion ($5 billion) to shore up the sector.

The fund will work by acquiring bonds issued by the Reits. The report names property companies such as Mitsui Fudosan and banks such as Mitsubishi UFJ Financial Group as well as the state-backed Development Bank of Japan as those participating in the fund, likely to be set up by August.

Japan is firmly on the radar of the private equity real estate firms. In April, Lone Star reportedly won the right to rescue Japan’s first failed J-REIT.

The Dallas, Texas-based investment fund was among four final bidders hoping to invest in New City Residence Investment Corp, which filed for bankruptcy last October.