Mori Building To Begin REIT Operations

August 10, 2005
Mori Building To Begin REIT Operations

TOKYO (Nikkei)--Mori Building Co. will enter the real estate investment trust (REIT) market as early as fiscal 2006, with plans to limit portfolios to high-quality, recently constructed buildings that have advanced earthquake resistance equipment.
The company intends to establish a private-offering REIT investment entity as early as the end of fiscal 2005. After receiving the required permission, it plans to move on to public offerings through the new entity.
Mori Building will aim for assets of 150 billion yen by the time it makes public offerings. Of those assets, 70 billion yen will be from a portion of the buildings that it owns, while some may come from purchases on the market.
The remainder will be diverted from the Mori Building Urban Fund, set up by the firm in 2003, which manages six properties that are under 10 years old, including Roppongi Hills Gate Tower.
Although it has developed, rented and managed its own buildings, the firm has had to rely on borrowings to secure capital because it is not a public company. It will likely use some income from REIT property sales to repay its borrowings.

(The Nikkei Business Daily Wednesday edition)