Japan Post Bank to begin investing in REITS

Nikkei reports that Japan Post Bank plans on investing in REITS, perhaps within the fiscal year:

The bank established a REIT-centric real estate investment department in February, advancing preparations to obtain permission for property investment. The Financial Services Agency intends to grant approval.

Japan Post Bank has 205 trillion yen ($1.83 trillion) in assets under management. High-yield foreign debt and other relatively risky instruments now account for 59 trillion yen of the total. Japanese government bonds made up around 40% of the bank’s holdings at the end of December, falling below 50% for the first time.

The bank’s target of 60 trillion yen in risk investment by March 2018 has already been met. How much of that amount REITs will account for has yet to be determined. The bank looks to include in its mix more assets seen gaining value in the medium term.

Interest in Japan’s REIT market has picked up since the introduction of negative interest rates made for easier financing. The Tokyo Stock Exchange REIT Index is up nearly 9% from the start of the year, while the Nikkei 225 has plunged over 17%.

Sources:
“Japan Post Bank looks to REITs in hunt for yield,” Nikkei Asian Review, April 2 2016

“Listed Index Fund J-REIT(TSE REIT Index) (TYO:1345) Quotes & News,” Google Finance, Retrieved April 6 2016