Mitsubishi Estate Company, Limited

Japanese real estate stocks rose today after the country's land ministry reported that nationwide land prices climbed for a fifth consecutive year, with the pace of growth the highest in more than 30 years. Data released late yesterday showed nationwide land prices rose 1.5% in the 12 months to July 1, 2026, while average land prices in the Tokyo metropolitan area rose 5.4% and the Osaka metropolitan area gained 3.6%. Rising land prices are a positive for property developers because they lift asset values and open the door to higher rents. Shares of Mitsui Fudosan, Japan's largest real estate developer by market value, pared their opening gains and were up 0.1%. Hulic rose 0.8%, while Mitsubishi Estate and Sumitomo Realty gained between 1% and 2%. The Nikkei index closed today's session up 0.69%.

Major real estate companies, including comprehensive developers, are stepping up data center development. According to the Ministry of Internal Affairs and Communications, the domestic related market is expected to exceed 5 trillion yen in 2028, and further growth is anticipated on the back of the artificial intelligence boom. Daiwa House Industry plans to build a total of 14 data centers in Inzai City, Chiba Prefecture, breaking ground on the fifth in late September. It has also developed a modular small-scale data center in which some components are manufactured at a factory and assembled on site, and the first such unit was completed in April in Okuma Town, Fukushima Prefecture. Mitsui Fudosan plans cumulative investment of more than 600 billion yen in data center-related projects by fiscal 2035, with development underway in four areas: Sagamihara City, Hino City in Tokyo, the Hokusetsu region of Osaka Prefecture, and the Tama region of Tokyo. In the Hino City project, the building's height was gradually lowered from an initial 80 meters to 63.5 meters in consideration of sunlight. New entrants are also appearing one after another. Mitsubishi Estate set up a data center business office in April and has already invested in multiple projects, and a data center in Ishikari City, Hokkaido, in which Tokyu Land Corporation participated in development for the first time, began operating in August using 100 percent renewable energy.

AP Thailand, together with Mitsubishi Estate, announced the successful delivery of the RHYTHM Charoen Nakhon Iconic luxury condominium project worth 5 billion baht, which has been 100% completed and is ready for ownership transfer and occupancy. This project is the 23rd flagship joint venture out of a total of 32 projects that the two companies have jointly invested in over 13 years, with a combined value exceeding 140 billion baht as of July 31, 2026. The project is located opposite Iconsiam, just 100 meters from the BTS Charoen Nakhon station, with only 577 units, and marks the return of the RHYTHM brand after 4 years.

As rising real estate prices expand unrealized gains at listed companies, 27 firms with unrealized gains on rental properties exceeding 200 billion yen have been identified, and five companies trading below 0.7 times adjusted price-to-book ratio that are expected to post record profits this fiscal year were highlighted as investment candidates. The average selling price of newly built condominiums in Tokyo's 23 wards surged to 136.13 million yen in 2025, and official land prices in the three major metropolitan areas as of January 1, 2026, rose 4.6 percent year on year for all uses on average. Mitsubishi Estate held unrealized gains of 5.5574 trillion yen as of the end of March 2026, and its adjusted price-to-book ratio, calculated by adding 70 percent of after-tax unrealized gains assuming a 30 percent tax rate to shareholders' equity, stood at 0.67 times as of August 12. Although real estate stocks face resistance due to lessons learned from past property boom collapses, the number of stocks trading far below one times adjusted price-to-book ratio after accounting for unrealized gains is increasing, and selective investment is judged to be effective.

AP has announced its readiness to hand over the LIFE Sathorn–Narathiwat 22 condominium, a joint venture project with Mitsubishi Estate valued at 1.8 billion baht, following the completion of construction. This low-rise condo in the heart of the CBD comprises two eight-storey residential buildings and a two-storey facilities building, totalling 416 units. It marks the 25th joint venture project between AP and Mitsubishi Estate. The company expects that opening the project for customer visits will boost confidence and stimulate ownership transfers in the second half of the year.

AP Thailand has launched a new condominium project, LIFE Sukhumvit–Rama 4, valued at 4.5 billion baht. It is the 29th joint venture with Mitsubishi Estate, located on Rama 4 Road, 550 metres from BTS Phra Khanong. The 46-storey tower, under the concept EVERYDAY EXTRAORDINARY, features four sky common area floors spanning over 5,800 square metres. Units range from one large bedroom and one bedroom plus to two bedrooms with two bathrooms, with prices starting at 2.99 million baht. AP targets presales of no less than 70 percent of the units launched for sale. This project is part of AP's Rama 4 condominium portfolio, which has a combined value of over 15.6 billion baht, including LIFE Rama 4–Asoke, which is 83 percent sold, and ASPIRE Sukhumvit–Rama 4, which is 72 percent sold.