Of the 3,803 TSE listed companies, 114 reported the sale of real estate assets in the 2022 fiscal year, according to Tokyo Shoko Research. This is the highest number seen since 2007. In the late 1990s and early 2000s, the typical annual number ranged from 150 to 230 companies.
The total reported transfers totaled 443.9 billion Yen (US$3.2 billion), down 15.7% from 2021 and the first decrease in 4 years. 90% of the 110 companies that reported actual transfer figures had seen capital appreciation in the assets sold, down from a 96.2% share in 2021.
In terms of operational performance, 33 companies that sold real estate holdings had reported a net operating loss for the 2022 year. The majority of those companies were in retail and service trades – industries that had been hit hard by the pandemic. Assets being sold included hotels and commercial buildings that had been suffering from low revenues.
The largest single sale in terms of land size was Hotel Toba Kowakien in Ise-Shima, Mie Prefecture. The waterfront hotel sits on 16.5 hectares of land. It was sold to a domestic company.
The biggest capital gain to be reported was for the sale of two commercial buildings in Shinjuku to KKR in March 2023. The seller, Odakyu Electric Railway, posted a 85.5 billion Yen capital gain. Tokyo Electric Power Company was in second spot with total capital gains of 62.5 billion Yen.
Real estate sales are expected to increase going forward as listed companies that have been struggling over the past three years look at shoring up funds to enhance operations as economic activity returns.
Source: Tokyo Shoko Research, April 28, 2023.
