Itochu Corp, one of the big 5 trading firms in Japan, plans to acquire Nippon Residential Investment Corp., a real estate investment trust (REIT) under the failed real estate fund opearator, Pacific Holdings Inc. according to Nikkei. If the acquisition of Nippon Residential succeeds, Itochu will combine it with Advance Residential Investment Corp,. Itochu's group REIT to create the largest investment trust in residential properties. Such a merger between REITs has not done yet in Japan. Since the parent company went bankrupt, Nippon Residential has been looking for a sponsor so that it can refinance its debts/bonds.
As the government has supported the real estate market with various kinds of measures, the property market seems to be stabilizing in big cities and we may see further consolidation of the REIT industry.
July 27, 2009
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