M&A of J-Reits

Since the first listing of units of Real Estate Investment Trusts in Japan (J-Reits) on the Tokyo Stock Exchange (TSE) in September 2001, J-Reits have become widely accepted among investors as a new type of moderate-risk product with a stable return. Since then, the number of listed J-Reits has increased rapidly to 42. However, the J-Reit market became sluggish in the latter half of 2007 and declined sharply in 2008. The TSE Reit Index was at 857 points at the end of November 2008, dropping approximately 67% from its peak of 2,612 points in May 2007. Most J-Reits are now traded at a discount to net asset value. In addition, some J-Reit sponsors, especially emerging real estate developers, have also been severely affected by the global credit crunch since the second half of 2007. The refinance risk, which is inevitable for leveraged products with low liquidity assets such as J-Reits,...