Japan Stocks Rise After Mitsui Fudosan Purchase of REIT Manager

Source from:  By Masaki Kondo and Patrick Rial Feb. 19 (Bloomberg) 02/19/2008

Japanese stocks gained, led by real estate shares, after Mitsui Fudosan Co. agreed to buy the asset manager of Frontier Real Estate Investment Corp. from Japan Tobacco Inc., fueling speculation more takeovers will take place. Mitsui Fudosan, Japan's largest developer, was headed for the highest close in two weeks. Sumitomo Realty & Development Co., the third biggest, advanced for a second day. Japan's real estate investment trusts gained. The Nikkei 225 Stock Average rose 112.73, or 0.8 percent, to 13,748.13 as of 9:29 a.m., while the broader Topix index gained 11.33, or 0.9 percent, to 1,344.32. The U.S. market was closed yesterday for the Presidents' Day holiday. ``Many JREIT's are trading at steep discounts,'' Toshihiko Okino, a Tokyo-based analyst at UBS AG, wrote in a report dated yesterday. ``Moves including the merger of peer JREITs and the taking of JREITs private are likely to emerge going forward.'' Mitsui Fudosan will buy Frontier REIT Management Inc. on March 24, the developer said yesterday, in the second takeover in Japan's 4.37 trillion yen ($40 billion) REIT market. The Topix Real Estate Index was the biggest gainer among 33 industry groups today. Nikkei 225 Stock Average futures expiring in March rose 1.2 percent in Osaka and advanced 1.1 percent in Singapore. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo at prial@bloomberg.net Enditem