UPDATE 1-Japan's Mitsui Fudosan to raise up to $3.6 bln in share issue

Tue May 27, 2014 3:56am EDT

Related Topics

(Add details and background)

TOKYO May 27 (Reuters) - Japanese real estate developer Mitsui Fudosan Co said on Tuesday it would raise as much as $3.6 billion through a share issue to fund its investments in office and retail properties in Japan.

Mitsui Fudosan, which is developing Tokyo's central Nihonbashi district, said it would sell as many as 110 million new shares in Japan and abroad. Based on Tuesday's close, the share sale would be worth 367.4 billion yen ($3.6 billion).

The new shares would represent 11 percent of the company's total shares and the price will be set between June 16 and June 18, Mitsui said.

Mitsui Fudosan is raising money as Tokyo's property market has rebounded after Prime Minister Shinzo Abe's aggressive government spending and loose-money policies started to drive the economy out of 15 years of deflation.

Analysts and property investors expect demand for space at prime office buildings will keep increasing as Japanese corporations boost their earnings.

Mitsui Fudosan, which also develops apartment buildings and warehouses, said it expects more investment opportunities in Tokyo ahead of the 2020 Summer Olympics.

Tokyo's vacancy rates for office buildings have been falling and rents have started rising at some of the buildings. Vacancy rates in Tokyo stood at 6.6 percent in April, down from 7.6 percent in October, according to Miki Shoji Co, a property services company.

($1 = 101.8750 Japanese Yen) (Reporting by Junko Fujita and Taiga Uranaka; Editing by Chris Gallagher and Miral Fahmy)

FILED UNDER: