TOKYO -- Trading house Mitsubishi Corp. plans to start a real estate investment trust in the U.S. targeting urban rental housing and suburban logistics centers, aiming for $1.5 billion in assets within five years, Nikkei has learned.
The portfolio will include a 25-story condominium in central Chicago spanning 320 units, as well as a six-story, 340-unit condo in downtown Dallas. The REIT will be the first launched independently in the U.S. by a Japanese company.
Japan's biggest trading company anticipates demand from investors seeking higher yields as historically low interest rates make bonds less attractive.
The initial annual yield for the new REIT is estimated between 4.5% and 5% in real terms, surpassing returns for U.S. Treasurys.
The REIT will be sold to a select group of institutional investors, including Japanese regional banks and insurers. Seven Japanese investors had already subscribed for a total of $300 million as of the end of September.
The REIT's investments in urban residential buildings will focus on those for dual-income, middle-class families, promising a steady flow of rent income.
Mitsubishi also looks to acquire distribution centers poised to benefit from the expanding e-commerce market.