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Is Japan's latest REIT boom overheating?

Orix JREIT acquired Hamamatsu Act Tower, a 47-story office building complex, in April.

TOKYO -- Investment money is flowing into Japan's booming real estate investment trusts. Japanese REIT managers have been scrambling to acquire properties away from the Tokyo metropolitan area, while non-Japanese players are betting on the market's future demand, thanks to Japan's continued ultralow interest rates, which should help achieve relatively high returns. Amid the growing momentum, concerns are growing that the market may be overheating.

In early April, about 50 retail investors attended a seminar on REITs in Tokyo. They were interested in the market's growth potential, while being concerned about overheating of the market. Retail investors have begun increasingly interested in REITs, due to the Bank of Japan's negative interest rate policy, which took effect in mid-February, said Daisuke Seki, head of IB Research & Consulting that hosted the seminar.

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