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Structure of J-REITs

A Real Estate Investment Trust (REIT) is a financial product that invests capital raised from investors in real estate such as offices and commercial facilities and pays out rent income generated from such properties and capital gains from changes in portfolio as distributions to investors.
Major investment targets for investment trusts were limited to securities such as stocks and bonds until the revision of the Investment Trust Law, which made it possible to make investments principally in real estate after November 2000. Created in the U.S. in 1960, they are called Real Estate Investment Trusts or REITs for short. Following the example in the U.S., they are called J-REITs in Japan.

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TRIM

Asset Management Company

Tokyo Realty Investment Management, Inc. (TRIM)
Based on the asset management agreement executed with JPR, TRIM conducts the selection, acquisition, management and disposal of real properties, fund procurement and other operations. TRIM is sponsored by 4 companies including Tokyo Tatemono, which provides strong support to TRIM.

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JPR

Investment Corporation

Japan Prime Realty Investment Corporation (JPR)

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JPR collects funds from investors and manage the funds by investing them in such real estate as office buildings and retail properties. The rent revenues from and gain on sale of such properties, etc. are distributed by JPR to the investors as cash distributions.

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General Meeting of Unitholders

The General Meeting of Unitholders corresponds to the general meeting of shareholders of a stock company, and is the supreme decision-making body of an investment corporation. The unitholders have voting rights, in accordance with the number of investment units they own, for certain matters designated by the Investment Trusts Act or

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Board of Directors

The Board of Directors corresponds to the board of directors of a stock company, and comprises the executive officer(s) and supervising officer(s) who execute and represent the business of an investment corporation. The Board of Directors have the right to approve such important matters as those related to fund procurement by the investment corporation and outsourcing of asset management and other operations, as well as the authorities designated by the Investment Trusts Act and the Articles of Incorporation and the authorities to supervise the execution of duties of the executive officer(s).

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Asset Custodian and General Administrator

Mizuho Trust & Banking Co., Ltd.
Mizuho Trust & Banking has executed a general administration and asset custodian agreement with JPR to conduct asset custody and general administration operations. The asset custody operation mainly refers to the custody of the title deeds of real estate, retaining JPR's assets separately from its own property. The general administration operations refer to issuance of investment units, administration of bodies (the general meeting of unitholders and the board of directors), accounting, payment of cash distributions and other operations excluding, however, operations regarding investment corporation bonds.

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Property Managers

Tokyo Tatemono Co., Ltd. and others
The property managers conduct maintenance and management of real properties, Their tasks include tenant management operations such as invitation of tenants, contract renewal and cancellation and collection of rents, and maintenance operations such as maintenance and inspection of buildings and facilities. They work to maximize the revenues and asset value of the buildings.

There are two types of REITs, Corporate Type and Trust Type. The Company provides asset management in a Corporate Type REIT.
A Corporate Type REIT establishes a corporation called an investment corporation and raises capital from investors, which is invested in real estate in the name of the investment corporation.
This investment corporation hires external professionals for asset management, asset custody, supervision of the management status and any other general trustee administration.
Among these operations, asset management may be assigned only to licensed asset management companies for investment corporations (REIT management companies) such as our company.

An investment corporation issues investment units equivalent to the shares of a stock company.
In addition, the investment corporation can virtually be exempt from the burden of corporate income tax by deducting distributions from gross income if it satisfies certain qualifications such as distributing more than 90% of the distributable profits to investors.
In other words, distributions higher than general shares can be generally expected due to preferential tax treatment.



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