Hulic Considers Expediting $1 Billion Japanese REIT IPOKathleen Chu and Katsuyo Kuwako
Hulic Co., a Japanese developer, is looking to accelerate the listing of a 100 billion yen ($1.04 billion) real estate investment trust as the market gains amid optimism the government will end deflation and boost the economy.
Hulic had said it plans to list the REIT, which includes office and commercial buildings in central Tokyo, and nursing homes, by the middle of 2014. The developer is considering a listing as early as March next year, said Takaya Maeda, general manager of business planning department at Tokyo-based Hulic.
“It is possible we may seek an early listing of a REIT in 2014,” said Maeda in an interview on March 13. “We will need to examine the market conditions.”
The Tokyo Stock Exchange REIT Index, which rose 34 percent in 2012, has gained 38 percent this year after Prime Minister Shinzo Abe introduced policies to boost the economy and end deflation. Funds raised by REITs through public offerings reached 337.8 billion yen so far this year, according to data compiled by Bloomberg. The total may exceed the 679 billion yen in 2007 because of measures introduced by the government to boost the market, said Junichi Tazawa, a REIT analyst at Barclays Plc in Tokyo.
Shares of Hulic rose 0.4 percent to 767 yen at the close of trading in Tokyo, the highest since Jan. 20, 2011. The stock has gained 32 percent this year, compared with the 34 percent gain by the Topix Real Estate Index.
Hulic, the owner of 163 properties, said it tripled the number of nursing homes to 17 from six last October. It plans to sublease the nursing homes to operators in order to receive stable rental income and avoid operating risks, Maeda said.
Hulic acquired Shoei Co. last year, boosting its leasing space for office, apartments and nursing homes by 62 percent after the acquisition, the company said.
J-REITs raised 480 billion yen last year through initial share sales and additional offerings, according to a report by Barclays.