Getting it REIT in Japan
“We were one of the first to offer services to Real Estate Investment Trusts, known as J-REITs in Japan,” says Shohei Harada, who is in charge of EY’s J-REIT practice. Shares in J-REITs are traded on the Tokyo Stock Exchange, and the trusts invest in real estate directly. “It’s a complex field combining property and investment products. As a result, our clients – the companies that run these trusts – place a premium on our deep industry knowledge of both real estate and financial services. The fact that we’ve been advising the J-REIT market since its inception adds to our specific knowledge.”
EY is the only organization in Japan to have a team dedicated to J-REITs, offering a one-stop shop for tax, accounting and regulatory-related services.
In January 2013, EY was selected by Nomura Real Estate Holdings when they established the Nomura Real Estate Master Fund, Inc., a J-REIT that comprises warehouses and commercial properties, mainly around Tokyo. We provided assurance, tax and advisory services in connection with the fund’s initial public offering (IPO) in June, the largest J-REIT IPO ever recorded, which raised ¥161b (US$1.7b).
“A J-REIT has to meet many regulatory requirements not only just in tax but also those set by Japan’s Ministry of Land, Infrastructure, Transportation and Japan’s Tourism and Financial Services Agency,” continues Shohei.
“Nomura was impressed by our reputation and good track record,” says Shohei. “We’d worked on two of their previous J-REITs and our knowledge of J-REITs goes back a long way. In 2001, we were selected as advisors for Japan’s first ever J-REITs, two IPOs that listed simultaneously. This came about because we were one of the first to commit to the emergent J-REIT market, working alongside regulatory agencies on various issues in the early stages.”