FAQ

JINUSHI creates safe real estate financial products, specializing in JINUSHI BUSINESS.
Based on our unique business model, we seek to become a major landowner in Japan.

JINUSHI BUSINESS consists of four steps: “Purchase land. Lease land. Sell the land being leased. Management of the funds of investors.”
In JINUSHI BUSINESS we do not possess any buildings. Instead, we execute long-term fixed-term land leasing contracts with tenants in order to produce stable long-term profits.

What is JINUSHI BUSINESS?

JINUSHI BUSINESS has three main advantages.

• 1. No need for additional investment
  The only investment is for the land, and tenants pay for construction and ownership of buildings. Therefore, there is no need for any additional investment such as maintenance, repair, renovation, etc. maintenance, repair, renovation, etc.
• 2. Stable long-term income is expected
  During the long-term contract period of 20 to 50 years, the tenant invests in buildings on the property. This reduces the risk of the property being vacated and creates expectations for stable long-term income.
• 3. Asset value is resistant to decline
  Tenants are obligated to return a vacant lot. After the period of the fixed-term leasing contract expires, the land is returned as a vacant lot. This ensures that assets are returned at their maximum value. returned at their maximum value.

JINUSHI BUSINESS was born from our difficult experiences in the past.
Prior to establishing JINUSHI REIT (during the late 1990s), our founder worked for a real estate company in a general trading company group. At the real estate company, he was involved in the development of general merchandise stores (GMS) and a building leasing business in Shiga Prefecture. Although the business went smoothly at first, the GMS tenant fell into a financial trouble and vacated the property. Fortunately, the property was located in front of a train station, so we were able to find a new tenant. However, as conditions demanded by the new tenant, we were forced to lower the rent and make an additional investment for renovating the building.
This experience taught us the risk of owning buildings dedicated to a specific tenant and operating in specific business categories. We realized that “the project would have gone well if we had leased only a land without constructing any buildings.”
Prior to our experience, the Act on Land and Building Leases was amended in 1992 to establish fixed-term commercial land leasing rights. As a result of this amendment, after leasing land to a long-term tenant, the property is always returned to the landowner as a vacant lot. We used the fixed-term commercial land leasing rights to create the real estate investment product, "JINUSHI BUSINESS". This product provides stable long-term income by leasing only a land without owning any buildings. We decided to make the real estate investment method "JINUSHI BUSINESS" the pillar of our company. This episode took place in spring of 2000, right around the time that we founded our company.

Recently, there are an increasing number of general trading companies and housing developers which handle investment in land only. This means that the number of competitors is gradually increasing; however, there are no other companies that specialize in land interest investment like JINUSHI.
Although there are many reasons for this small number of competitors, we believe that the main reason is that real estate business in Japan focuses on increasing the value of land and buildings by constructing buildings with a variety of special measures. We believe a barrier to entering this business is the lack of belief in the rationality and market outlook for JINUSHI BUSINESS that specializes on land only.
As the only company that specializes exclusively in JINUSHI BUSINESS, and through the establishment of a JINUSHI Private REIT Investment Corporation by our group company JINUSHI Asset Management, JINUSHI has established our position in the real estate financing industry and leads other companies.

In September 2016, we established a JINUSHI Private REIT Investment Corporation (hereinafter, “JINUSHI REIT”), the world’s first REIT specializing in land interest. This formed our JINUSHI BUSINESS into an integrated income model spanning from land procurement to sales and subsequent asset management.
Utilizing sponsor support from JINUSHI Co., Ltd., JINUSHI REIT achieved the initial plan of 100 billion yen of assets in five years after starting operation. JINUSHI REIT now aims to reach 500 billion yen as soon as possible, and we have set a medium-term target of 300 billion yen as a milestone.

Details are available here.

Main tenants are supermarkets, drugstores, and other commercial facilities closely connected to daily life. Other diverse tenants include hotels and schools.

Details are available here.

Land information is mainly acquired from the following three routes.

• 1. Requests for land purchases received directly from tenants seeking to open a store, with opening of a store as a prerequisite for the purchase.
• 2. Requests received from housing developers to develop convenient lifestyle facilities on nearby land when there is no demand for housing development on the total area of the site.
• 3. Land information acquired by sales representatives of the Company by using unique network.

The main reason is that tenants want to concentrate their capital on their main business. Since the Company invests in land, tenants are able to open facilities while investing only in buildings that are sales assets. In this way, JINUSHI BUSINESS creates merits for both the Company and tenant. The focus on management indicators such as ROE in recent years have spurred the trend of tenants themselves to not wanting to own plots of land as fixed assets.

Fixed-term land leasing rights (the contract period is mainly 20 to 50 years) are set with the tenant. At first glance, a fixed-term land leasing contract that protects the landowner may appear to be a strict condition for tenants. However, tenants have needs for not owning land. Furthermore, tenants execute a contract after thoroughly reviewing future earnings based on investing in a building for opening their facility. This means that the interests of the Company and our tenants match. (From the perspective of the Company, setting strict contractual conditions ensures stable income for our real estate product.)
Moreover, the Company considers the business practices of the attracted tenant and the store opening strategy for that region in order to select the optimal tenant for contracting each property.

In principle, the Company establishes a prospect for attracting tenants at the time of land purchase and securing sales destinations such as JINUSHI REIT. Therefore, it is difficult to envision cases in which the purchased land cannot be sold.
However, the Company prepares for the possibility that sale is not possible by hedging risk to prepare for contingency and seeking to ensure stable management. Specifically, the Company engages in long-term bank financing with an approximate minimum of 10 years and a maximum of 30 years, and by abolishing restrictive financial covenants. Even in the case of the Lehman Shock, a financial crisis the likes of which is said to occur only once every 100 years, the real estate market had recovered in three years. Therefore, even in the event of a financial crisis, the Company believes that the real estate market will recover in approximately three years.
Furthermore, as discussed above, tenants have already been attracted at the time that land is purchased. Accordingly, even if land cannot be sold, the Company continues to receive leasing income. This enables continued operation of our business.