Mitsui Fudosan Is One of Japan’s Largest Property Developers, With More Retail Leasing Than Rivals

Mitsui Fudosan is historically Japan’s second-largest real estate developer after Mitsubishi Estate, but since Mitsui expanded its capital base with a 12.5% equity offering in 2014, it has grown to become the largest by total assets and book value and rivaling Mitsubishi Estate in terms of market cap. Compared with Mitsubishi Estate and Sumitomo Realty, for both of which office leasing generates close to two thirds of operating profit, Mitsui Fudosan is more diversified into retail leasing with its Lalaport malls and Mitsui Outlet Parks (although Mitsubishi also has a successful outlet joint venture with Simon Property). We see Mitsui as being skilled at “machizukuri”--integrating office, retail, hotels, and residential properties to create a new area that thrives more than a district dedicated to a single use alone. Prime examples of this are the ongoing redevelopment of the Nihonbashi district in the center of Tokyo--Mitsui’s historical home--and the Hudson Yards project on the far west side of Manhattan.