June 17, 2009 / 10:23 AM / 9 years ago

INTERVIEW-M'bishi Estate eyes J-REIT, US property fund

* Interested in buying Japanese REIT

* Preparing to launch U.S. investment fund

* Mulls buyout of real estate investment managing firm

* Japan residential market won’t fully recover until FY2010

By Mariko Katsumura and Emi Emoto

TOKYO, June 17 (Reuters) - Mitsubishi Estate Co (8802.T), Japan’s second-biggest developer, is interested in buying a real estate investment trust (REIT) in Japan and preparing to launch a property investment fund in the United States, its president said on Wednesday.

Mitsubishi Estate President and CEO Keiji Kimura also said the company is keen to buy a real estate investment management company overseas as it aims to raise its global profile.

Japan’s property market has been hit hard as the nation’s worst recession since World War Two saps demand for houses and office space and hard-pressed banks rein in lending to the sector, one of the most highly indebted in Japan.

Mitsubishi Estate has fared better than smaller real estate firms because it relies more on the office leasing business. But looking for more growth, it has been eyeing overseas expansion as cross-border property investments accelerate around the world.

Kimura said the planned U.S. fund would initially target office buildings in New York. Although the fund’s size is still undecided, Mitsubishi plans to use resources from the U.S. Rockefeller Group, which it took control of in 1989.

“We want to launch (the fund) as early as possible ... I see some moves in the property market there,” said Kimura.

In Japan, Mitsubishi Estate already sponsors Japan Real Estate Investment Corp (8952.T), which invests only in office buildings. But Kimura said “it would make sense to own (sponsor) another one” that invests in commercial or residential properties.

    “It could be M&A, or we might launch an original one,” Kimura told Reuters in an interview.

    “We are interested if there’s an ideal deal ... but we’ll have to carefully look into the (targeted) REIT’s compliance, details, management and governance and so on,” Kimura said.

    Kimura said Japan’s residential market, which has been in a slump, would probably not fully recover until the latter half of the year to March 2011.

    (Editing by Michael Watson)

    ((mariko.katsumura@thomsonreuters.com; +81-3-6441-1811; Reuters Messaging: mariko.katsumura.reuters.com@reuters.net))

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