What is Real Estate Investment Trust？

In general, real estate investment trust (REIT) are financial instruments that pay their investors cash distributions derived from the rental revenue generated by leasing real estate including buildings which have been acquired through investing the funds procured from investors.

　

Structure of J-REIT

　

  • Rent earned through real estate leasing is distributed to investors.
  • Investment units can be traded on the Tokyo Stock Exchange J-REIT market at any time.
  • Compared to direct real estate investment, investment in real estate in small amounts is possible.

　

Main Returns and Risks of J-REITs　

Main Returns
Relatively high distribution yield
Stable distribution
Benefit from diversified investment
Resilient against inflation
Main Risks
Potential capital loss
Fluctuation in distribution due to moving out of tenants, aging of properties, etc.
Fluctuation in distribution due to economic conditions and natural disasters

　

〈The risk and return relationship of each financial instruments〉

J-REITs are designed as a financial instrument bearing medium risk and medium return and falling between deposits or bonds (low risk, low return) and stocks (high risk, high return).

(Note) Total return (the sum of income return and capital return) is indicated.

　

For Details

Tokyo Stock Exchange, Inc.　https://www.jpx.co.jp/english/

The Association for Real Estate Securitization　https://www.ares.or.jp/en/

The Investment Trusts Association, Japan　https://www.toushin.or.jp/english/

　

Investor