Japanese Property Developers’ Results in Line; Recovery Continues in Retail Leasing and Hotels

We maintain our fair value estimates of JPY 2,800 for Mitsui Fudosan, JPY 2,200 for Mitsubishi Estate, and JPY 4,000 for Sumitomo Realty following the Japanese real estate developers’ results for the second quarter in their fiscal years ending March 2023. Our fair value estimates are equivalent to 0.54 times net asset value for Mitsui Fudosan, 0.57 times for Mitsubishi Estate, and 0.45 times for Sumitomo Realty, assuming 30% tax on unrealized gains, and represent 17% upside for Mitsubishi Estate, 11% upside for Sumitomo Realty, and 6% upside for Mitsui Fudosan from their current share prices.