Project Manager Asset Management Business Dept.
Financial Business Div. Corporate Development Business Unit
It wasn’t the easiest of times when I was seconded to Mitsui & Co., Logistics Partners the company that manages Japan Logistics Fund in May 2013. Japan Logistics Fund, or JLF, was the first dedicated logistics REIT in Japan when it launched in 2005, but by 2013 five more REITs had come to market in the same category and competition was definitely heating up. Meanwhile, one of our warehouses was temporarily shut for redevelopment, which was dragging down our performance.
To reestablish our frontrunner status, the boss decided that we needed to raise money by issuing new units. In September 2013, the fund held its first fund-raising for three years, raising about 15 billion yen, enough for us to acquire multiple high-quality properties in one go.
I helped prepare the prospectus. My job was to come up with the “equity story”—a simple, convincing narrative to explain how we will earn a good return. The story we came up with was built around the idea of combining “stability” and “growth” in dividend-per-unit terms.
A little background: In 2005, when the fund was launched, we’d had the field to ourselves and both our asset value and our distributions, or DPU, rose. Then, in the aftermath of the 2008 financial crisis, we offered stability as regards DPU, but little in the way of growth. We proposed that the next phase for the fund would be to bring those two things—stability and growth—together by leveraging our five unique strengths: the experience and network that MLP had built up as a logistics REIT pioneer; Mitsui & Co.’s long background in logistics; the financial buffer represented by our high level of unrealized gains; our robust financial base and excellent credit rating; and finally the ability to increase the value of our existing assets by redeveloping them ourselves.
I was also involved in investor relations. We go out and make presentations to our investors twice a year. With many other REITs, the CEO or the CFO is the only outward “face” of the company, but JLF isn’t like that. I put my name forward and was dispatched by myself to report to the regional banks, credit associations, and so on. I was a little worried that the investors, many of whom are elderly, wouldn’t take a youngster like me seriously, but that wasn’t a problem.
In my second year, I was part of the IR team that toured Asia and the US to speak to our foreign investors. They’re pretty aggressive in their questioning and really put you on the spot, so that was a good learning experience for me.
MLP consists of around thirty people, mostly specialist professionals hired to perform very specific jobs. I was determined to be a productive member of the team from day one. Company policy now is very much for us to get out in the field and acquire first-hand knowledge and experience, and I was definitely able to do that. I’m much more attuned to the market and aware of the importance of maintaining a strong share price after my two-year secondment.
I’m now in the Corporate Development Business Unit, a unit that was set up in April 2015. My mission there is twofold: firstly, to support MLP and Mitsui & Co., Realty Management, another company which manages privately, rather than publicly, placed real estate funds; and secondly, to support a move into different asset classes, our overseas expansion, and the launch of new REITs.
By bringing together finance and logistics functions, the Corporate Development Business Unit aims to create a platform for developing innovative business models to drive our future growth. In that sense, it plays a key role inside Mitsui. It’s an exciting place to be.
Interviewed September 2015