Mitsubishi Corporation-UBS Realty Inc. : Mitsubishi Corporation

The start of Japanese Real Estate Investment Trusts (“J-REIT”) was in September, 2001. With a total of 14 listed firms and total market value of ¥1.4 trillion at present, J-REIT market has been expanding satisfactorily. J-REIT market is thought to still have a lot of room for further growth, seeing that the United States, whose GDP is 2.5 times as large as Japan’s, has one worth ¥24 trillion.

In 2000, Mitsubishi Corporation set up Mitsubishi Corp. - UBS Realty Inc. for REIT operation, a joint venture with UBS, a major European financing firm. The idea was to pair the Mitsubishi Corporation’s capabilities of collecting information on and selection of retail properties, and of large-scale real estate development, with UBS’s network of investors and experience in real estate management overseas.

Mitsubishi Corp. - UBS Realty Inc. listed Japan Retail Fund Investment Corporation (“JRF”) on Tokyo Stock Exchange in March, 2002. JRF is characterized by the circle of its investment subjects, which is narrowed to shopping centers and other such commercial facilities, and especially those with tenants that have high credit standings, such as Ito Yokado and Aeon. As compared to office buildings, commercial facilities apply longer periods in tenancy contracts and therefore afford better prospects for stable and long term leasing income.

Developments such as the progressing reorganization in the retail industry, accelerated disposal of bad debt, and spread of accounting for the impairment of assets are expected to add impetus to the sale of idle properties by business firms and off-balancing of commercial facilities by the retail industry. Amid these megatrends, Mitsubishi Corp. - UBS Realty Inc. could very well further expand its REIT business driven by commercial facilities, as it can benefit from the sharp eye of the Mitsubishi Corporation Group, which includes Diamond City, a developer specializing in such facilities.

Structure of J-REIT