TOKYO -- Sumitomo is rolling out an unlisted real estate investment trust on Friday, tracking four properties developed by the trading house.
SC Realty Private Investment's portfolio will initially include office and commercial buildings in Tokyo and Osaka, with the scale of the REIT coming to 32.4 billion yen ($268 million).
The REIT will manage funds from 68 Japanese institutional investors, including megabanks, regional banks and pension funds.
While government bonds provide meager returns amid Japan's ultralow long-term interest rates, the REIT will offer an expected yield of about 4% a year.
With demand strong from investors, the plan is to double assets by the end of the year and expand the REIT to 200 billion yen in five years, but the time frame may be moved up by a year or two.
The Japanese trading house seeks to use the funds collected for new development projects, raising capital efficiency.