Fifty-five out of 57 real estate investment trusts (REITs) in Japan are currently undervalued, with price-to-net-asset-value (NAV) multiples falling below one. In a surprising development, Singapore-based 3D Investment Partners has launched a tender offer for NTT Urban Development REIT Investment, a Japanese company. This move is reminiscent of 2019, the last time Japan's undervalued REIT market saw a bullish turn.
The tender offer has caught NTT UD REIT Investment off guard, as 3D Investment Partners did not notify the Japanese company in advance. This unexpected maneuver echoes the actions that led to the market's positive shift four years ago. The Japanese REIT market, deeply undervalued in 2019, experienced a resurgence and turned bullish during that period.
An executive from a listed REIT asset management company acknowledged the significance of this move. Commenting on the tender offer, the executive stated, "So, they've made a move." This statement underscores the potential impact of 3D Investment Partners' actions on Japan's REIT market.
The Japanese REIT market currently shows significant potential for growth, given the undervaluation of many trusts. This situation presents opportunities for investors looking to capitalize on the market's recovery. The involvement of foreign investors like 3D Investment Partners highlights the attractiveness of Japan's real estate sector.
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