Japanese Govt May Embark Upon Massive Sale Leaseback Effort

The Times - November 29, 2005

A powerful committee of ministers, senior academics and business leaders is expected to tell the Japanese Government today to embark on a colossal 120 trillion yen (GBP 600 billion) sale of assets over the next ten years. As well as triggering an unprecedented bonanza sale of state financial assets, today's report by the Council for Economic and Fiscal Policy (CEFP) is tipped to include a recommendation that the Government extend the classes of assets up for grabs and also begin selling property.

Some of those assets would be strips of unused land dotted around the country, but more aggressive members of the committee are understood to be pushing for the sale of government buildings in the heart of the capital. One source close to the committee told The Times that the CEFP was even considering the idea of selling the major ministry buildings in the Kasumigaseki district. The prime sites would be sold to developers and leased back to the bureaucracy.

If the full range of the CEFP’s proposals were adopted and rolled into a new law on state-held assets, next year could see the start of a process that investors have been dreaming of for years, with desirable tracts of land in Central Tokyo suddenly becoming available to the private sector. Leading Japanese property developers, such as Mori Building and Mitsubishi Estate, almost certainly would be enthusiastic buyers, but, analysts say, the sale would also be likely to attract foreign capital of the sort wielded by the likes of Morgan Stanley and the Carlyle Group. Sphere: Related Content