July 25 (Bloomberg) -- Itochu Corp. may buy Nippon Residential Investment Corp. and merge it with the trading house’s own real estate trust, Nikkei English News said.

Combining Itochu’s Advance Residence Investment Corp. with the property manager would represent the first merger of real estate investment trusts in Japan, Nikkei said. Itochu has acquired preferential negotiating rights to Nippon Residential, which is under the umbrella of failed REIT management firm Pacific Holdings Inc., Nikkei said, without citing a source for the information.

Nippon Residential isn’t the source of the report, it said in a statement released today. Advance Residence also said it isn’t the source of the article and that no such deal has been decided, according to a statement today.

Other potential bidders for Nippon Residential include Mitsubishi Estate Co., Nomura Real Estate Development Co. and Mitsui & Co., Nikkei said.

Last Updated: July 24, 2009 22:48 EDT