My firm, SRM has covered all three real estate investment sectors, which are publicly traded REITs sector, privately placed REITs sector and private funds sector.
Among them, J-REIT is a frontrunner and trend setter in terms of ESG obviously primarily because of the requirement by their global investors, especially European ones, early on.
ESG is used to be regarded and treated as a cost center rather than a profit center.
But, it has been changed and evolved over years, accelerated by this pandemic.
ESG is now mainstream and a very important investment thesis to pursue not immediate, short-term return, but the long-term, sustainable, long-lasting return over years to come.
Vast majority of J-REITs prioritize ESG with the aim at higher, ambitious standards, which are validated by the higher participation ratio of GRESB with higher ratings.
ESG is nothing new in Japan.
Similar value and culture have been around over several centuries and inherited from generation to generation although it was not recognized and promoted at the same level of public awareness globally.
Japanese traditional culture and value tend to respect and preserve natural environment rather than overcome even though some of them are brutal, devastating Mother Nature such as earthquake and hurricane.
So, ESG is something Japan is easy to adopt and embrace as an extension of traditional Japanese value and culture.
As a group company of Sumitomo Corporation embracing business philosophy about ESG “Benefit for self and others, private and public interests are one and the same” for more than 400 years, my firm is now doing all kind of ESG initiatives with the hope that J-REIT will lead entire Asia Pacific REITs to the higher level than the rest in the world.
