Japan Property Developer FVEs Up 2%-3% as We Roll Our Model; Mitsubishi Estate Is Our Preference

We raise our fair value estimates for Japanese developers Mitsui Fudosan, Mitsubishi Estate, and Sumitomo Realty by 2.3%-2.6% as we roll our model forward a year. Mitsui Fudosan's valuation goes from JPY 2,640 to JPY 2,700, or 0.56 times net asset value, Mitsubishi Estate's from JPY 2,050 to JPY 2,100, or 0.62 times, and Sumitomo Realty's from JPY 3,800 to JPY 3,900, or 0.47 times, implying upside of 6% for Mitsui and Sumitomo and 16% for Mitsubishi. Mitsubishi Estate is our investment preference in the sector at current prices.