Real Estate M&A as a New Method for Safely Buying Property in Japan

What is Real Estate M&A

Real estate mergers and acquisitions (M&A) have become increasingly popular in Japan as a means of addressing succession, transferring assets, and restructuring businesses. In addition to the sale of real estate, corporations are also considering purchasing or exchanging shares in the company owning a specific asset. Thus, companies can transfer possession of a particular asset through the sale of company shares.

In principle, the buyer of real estate merges with another company or buys its shares in the target company, while the seller is entitled to receive compensation for the transferred asset. Unlike traditional property sales, the buyer, by purchasing shares in the company, will receive the right to own the property by virtue of the company owning the asset. In other words, the company buying shares in another company acquires ownership of the real estate owned by the target company.

Such a transaction may turn out to be crucial if there is a successor problem or if an owner wants to exit the real estate asset. At the same time, care should be taken in such deals to examine the balance sheet, liabilities, legal issues, taxes, and bookkeeping of the target company. The value of the real estate involved in the deal is of particular importance in real estate M&A.

Thus, real estate M&A deals involve a complex transaction process that requires knowledge of not only real estate and finance but also legal and tax aspects.

Real Estate M&A Consultant Association is working to provide education and prepare specialists in the field of real estate M&A, in particular for the real estate sector. Loca Management K.K. will provide real estate M&A consultants with knowledge and expertise in tax, legal, and valuation topics to support their clients’ deals with a reliable third party and make well-substantiated decisions at various stages of the M&A process.

In the current environment of Japan’s evolving real estate market, real estate M&A can be an effective way to address succession, restructuring, or other challenges, including exits from property ownership. Nevertheless, it is necessary to choose a suitable deal structure and carefully analyze the assets and liabilities of the target company to ensure the highest degree of protection and reliability in the implementation of the transaction.

Benefits for Foreign Investors

Through this partnership, Property Access can now introduce overseas investors, particularly from Singapore, South Korea, and the Philippines where the company has strong business bases, to investment opportunities in "corporations," in addition to the traditional sale of physical real estate. This ensures investors receive secure transactions with tax and legal matters thoroughly managed, creating a new model of real estate marketing within the Japanese market.

The scheme offers the advantage of transferring the “corporation holding real estate” as the transaction subject, enabling the seamless continuation of contractual and credit relationships with financial institutions, including bank accounts that are typically difficult to open, without disruption.

Our team of seasoned professionals at PropertyAccess is dedicated to helping you navigate Japan’s real estate market with confidence.

With deep local knowledge and a commitment to personalized service, our experts are here to guide you every step of the way.

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