APREA Member REIT Reports
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Trend in foreign ownership of J-REIT units
By Shai Greenberg; Hiroshi Takahashi; Akira Ota
Purpose
This study examines trends in the foreign ownership ratio of Japanese real estate investment trusts (REITs) from 2014 to 2023. Using panel regressions, it explores how firm characteristics, macroeconomic factors and policy interventions shape foreign investment patterns, offering insights for managers, investors and policymakers.
Design/methodology/approach
Using panel regression (fixed and random effects) on 33 J-REITs, this study analyses firm-level, asset type, sponsorship and macro-financial factors as well as the impact of inclusion in the FTSE EPRA/NAREIT Global Index effect on foreign ownership.
Findings
Market capitalization, yen appreciation, hotel sector exposure and global index inclusion are positively associated with foreign ownership, whereas higher leverage, Bank of Japan J-REIT purchases, stronger ROA, higher policy rates and logistics sector exposure are negatively associated.
Practical implications
The findings provide actionable insights: for investors, market size, sector and index inclusion signal liquidity and accessibility; for J-REITs, asset risk–return characteristics, sector choice and leverage discipline matter; for policymakers, index engagement and monetary policy influence foreign capital flows.
Originality/value
To the best of our knowledge, this is the first study to apply panel regression to foreign ownership of J-REITs, highlighting sectoral and macro-financial drivers and providing evidence from the world’s third-largest REIT market.
APREA C-REITs Roundup (July 2025)
- C-REITs returns fell marginally by 0.3% M-o-M in July to underperform the region’s REITs, as well as the SSE Composite, which rose 3.7% in the same period. Offshore listed Chinese REITs also rose by over 6% for a second consecutive month.
- Chinese stocks have bounced off their April lows, with ample domestic liquidity sustaining the rally. Markets are reacting positively to recent government moves to curb excessive price wars and overcapacity in some sectors, which could ease deflation and boost corporate earnings. The increase in risk appetite have likely prompted a rotation out of more defensive stocks, like REITs.
- The major REIT sectors corrected, with rental housing suffering the largest drop of over 3%. Industrial parks and logistics sectors remained relatively resilient.
B&I Capital Asian Market Outlook – August 2025
Asian Market Outlook – August 2025 (B&I Capital)
Macro Overview
- Favorable backdrop for Asian REITs as inflation cools in Asia ex-Japan and peaks in Japan.
- Weak US labor data and tariff induced economic instability signal potential Fed easing.
- Stable to declining inflation across Asia supports RE demand, with high occupancy and rising rents in most sectors.
- Asian RE securities may act as equity safe havens in a weak USD environment.
Japan
- BOJ closer to rate hike amid elevated inflation assessments.
- JREITs have aggressively sold less competitive assets to fund unit buybacks, maintaining performance despite rate concerns.
- Rent growth offsets interest expense; preference remains for Office, Hotel, Diversified, and Logistics REITs.
- Construction cost increases and regulatory tightening (e.g., Chiyoda ward) may dampen Developer sentiment.
- Large developers’ Q1 results are expected strong, but short-term catalysts are limited.
Australia
- RBA held rates steady, but recent trimmed mean inflation suggests easing is likely.
- FY2025 earnings should meet/exceed guidance, though FY2026 guidance may be conservative due to slower rate cuts.
- Goodman Group may underdeliver on guidance due to slow JV/tenant signings for data centers.
- Office market shows recovery, with peaking vacancy/incentives—positive for names like Charter Hall, Dexus, and Mirvac.
Hong Kong
- Positive momentum across sectors: Lower HIBOR supports funding, stock market and IPO activity improving, which has historically led to increase in office space demand.
- Luxury retail leads sales growth; residential sector benefits from easing buyer restrictions.
- Proposal for a “Property Purchase Capital Connect” could boost demand by 45k units.
- Preference for Retail REITs (e.g., Link REIT, Fortune REIT) and HK Land for its capital return focus and NAV narrowing strategy.
Singapore
- Continued capital raises (e.g., CICT’s USD 500m for CapitaSpring) reflect proactive acquisition strategies.
- Falling inflation (<1%) supports lower refinancing costs and likely boosts equity demand for REITs.
- Sector fundamentals remain strong despite some selling pressure to fund capital raises to create opportunities.
- Centurion is marketing a new REIT backed by worker dormitory and student accommodation, likely to draw strong interest.
Asian Market Outlook – July 2025 (B&I Capital)
Overview: Asian real estate securities are up 17.53% YTD in USD, supported by recovering REITs/Developers, positive FX, and falling rates reigniting investor interest. Lower borrowing costs in Asia ex-Japan enable earnings upgrades and accretive acquisitions, while a weak USD, low growth, and falling rates continue to support positioning in the sector.
- Japan: JREITs up 11.9% since January but still trade at a 13% NAV discount. Ongoing asset sales and buybacks continue, while BOJ remains cautious amid US-Japan trade tensions. Fundamentals in Office and Hotels remain strong, and rising construction costs are limiting new supply.
- Australia: The RBA is expected to cut rates later this year, with inflation within target and labour markets softening and part-time jobs declining. We are maintaining overweights in Residential-Diversified, Retail, and Self-Storage. Macro data is expected to drive prices ahead of August earnings.
- Hong Kong: HK real estate stocks rose over 20% in H1 2025, supported by falling rates, recovering retail, residential and tourism activity, and underweight investor positioning. HK Land has led gains on asset sales, buybacks, and dividend enhancement, while large-cap developers remain at wide NAV discounts.
- Singapore: Large-cap SREITs are trading at 2025 highs, supported by falling rates reducing refinancing costs and enabling DPU-accretive deals. The recent NTT Global Data Center REIT IPO was 2.5x oversubscribed with an initial 7.5% yield. New residential cooling measures are unlikely to materially impact the sector.
Asia Pacific Logistics Occupier Survey 2025 (CBRE)
The 2025 CBRE Asia Pacific Logistics Occupier Survey reveals a landscape of cautious optimism among occupiers, shaped by ongoing geopolitical tensions and shifting global trade dynamics. While short-term business confidence has dipped—particularly due to tariff uncertainties and regulatory challenges—long-term expansion plans remain intact.
Key findings highlight a growing trend toward diversification of supply chains, an increase in outsourcing, and a pivot toward asset-light strategies to mitigate risk and manage costs. Occupiers are showing strong interest in emerging economies, with India standing out for its robust occupier sentiment, while mainland China continues to grapple with oversupply despite signs of stabilisation.
