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J-REIT Green Bond Issuance Expected To Hit Record Volume In 2021

Logistics facilities were the most active issuers.

December 15, 2021 – The annual amount of green bonds issued by Japan’s real estate investment trusts (REITs) is expected to reach the largest amount ever by the end of this year of more than 125 billion yen (US$1.1 billion). 

This is according to a study by the Urban Research Institute as published in the latest issue of the Nikkei Real Estate Market Report. 

The study noted that total issuance in the first half of 2021 hit 44.7 billion yen (US$390 million), the largest first-half amount recorded ever. 

Each green bond issuance ranged from 1 billion yen (US$8.6 million) to 12 billion yen (US$100 million), and some were 2 billion yen (US$17 million) or less. The redemption period ranged from three years to 30 years.

The study also showed that since the issuance by Mitsubishi Corporation’s Japan Retail Fund (currently Japan Metropolitan Fund) in 2018, green bonds have been issued by REITs every year.

Looking at the targeted asset type, logistics facilities accounted for the highest amount issued because of strong demand for green facilities, Nikkei said.