Sumitomo Realty & Dev Co Stock (OTC: SURDF)

Latest news for Sumitomo Realty & Dev Co (OTC:SURDF) Stock

Sumitomo Realty & Development is one of the three big Japanese real estate companies. Unlike Mitsubishi Estate in Marunouchi or Mitsui Fudosan in Nihonbashi, it did not inherit a cluster of prime properties from its prewar predecessor, so Sumitomo Realty has built up a portfolio dispersed across central Tokyo (not just in the main business districts) by opportunistically redeveloping plots of land acquired piecemeal. After office leasing, condo development is a relatively important business for Sumitomo Realty, contributing close to one fourth of its operating profit. The firm is slightly smaller than Mitsubishi Estate and Mitsui Fudosan by assets and has more financial leverage than they do.

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Elliott Management, a U.S.-based investment fund, has been increasing its stake in Mitsui Fudosan, Japan&#39;s top property group, since last year. This has positioned Elliott as one of the developer&#39;s five largest shareholders, giving it the leverage to make these demands. 

Activist Investor Presses Mitsui Fudosan To Offload Tokyo Disney Resort Operator Shares, Proposes $6.7B Buyback: Report

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Sumitomo Realty & Dev Co

Activist investor Elliott Management has acquired a 2% stake in Mitsui Fudosan Co Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/MTSFY#OTC">MTSFY</a>), a leading Japanese developer. The investor is now reportedly pressuring the company to sell its shares in Oriental Land (OTC:<a class="ticker" href="https://www.benzinga.com/stock/OLCLY#OTC">OLCLY</a>). 



What Happened: Elliott Management, a U.S.-based investment fund, is advocating for Mitsui Fudosan to divest its stake in Oriental Land, a key operator of the Tokyo Disney Resort, <a href="https://asia.nikkei.com/Business/Travel-Leisure/Activist-fund-Elliott-pushes-Mitsui-Fudosan-to-dump-Tokyo-Disney-stake">reported</a> Nikkei Asia on Monday. The activist investor has been gradually increasing its stake in Mitsui Fudosan, positioning itself as one of the company&#8217;s top five shareholders.



Elliott Management is proposing that the proceeds from the sale of the Oriental Land shares, valued at approximately 500 billion yen, be used for a 1 trillion yen ($6.74 billion) share buyback. The activist investor believes that this move could significantly improve the developer&#8217;s return on equity, which currently stands at around 7%, compared to 10% and 9% for its competitors Nomura Real Estate Holdings Inc (OTC:<a class="ticker" href="https://www.benzinga.com/stock/NMEHF#OTC">NMEHF</a>) and Sumitomo Realty &amp; Development Co Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/SURDF#OTC">SURDF</a>), respectively.



Despite Mitsui Fudosan&#8217;s historical ties with Oriental Land, Elliott Management is advocating for a complete divestment of the shares. The investor believes that this move would enable Mitsui Fudosan to improve its return on equity, which currently lags behind its competitors.



See Also: <a href="https://www.benzinga.com/markets/commodities/24/01/36865220/with-an-anticipated-supply-gap-has-the-recent-sell-off-in-lithium-equities-created-opportunit?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">With An Anticipated Supply Gap, Has The Recent Sell-Off In Lithium Equities Created Opportunities For Investors?</a>



Mitsui Fudosan, Oriental Land, and Elliott Management did not immediately respond to <a href="http://pro.benzinga.com/" target="_blank" rel="noreferrer noopener">Benzinga</a>'s request for comment.



The Oriental Land Company fully owns and operates the Tokyo Disney Resort under a license from The Walt Disney Company.



Why It Matters: Elliott Management has been actively involved in the Japanese market. The firm previously acquired shares in SoftBank Group and advocated for a share buyback. Before Toshiba went private, Elliott also appointed a director to the tech group&#8217;s board. More recently, Elliott became a major shareholder of Dai Nippon Printing and is pushing the firm to sell off real estate holdings and cross-held shares.



These developments are in line with Elliott&#8217;s previous activities, such as its <a href="https://www.benzinga.com/news/23/01/30516776/activist-investor-elliott-makes-multibillion-dollar-investment-in-salesforce-wsj">multibillion-dollar investment in Salesforce</a> and its subsequent push for changes in the company&#8217;s strategy. The current move to influence Mitsui Fudosan&#8217;s strategy reflects Elliott&#8217;s ongoing efforts to drive change in the Japanese market.



Meanwhile, Walt Disney Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIS#NYSE">DIS</a>) will <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/02/36944310/disney-q1-earnings-preview-media-company-battling-desantis-musk-peltz">report first-quarter financial results</a> after market close on Wednesday. Disney is expected to report first-quarter revenue of $23.685 billion according to data from Benzinga Pro. The company reported $23.512 billion in revenue in the prior year period.



Read Next: <a href="https://www.benzinga.com/markets/equities/24/02/36925173/if-you-invested-1000-in-apple-when-steve-jobs-returned-to-apple-28-years-ago-heres-how-much-youd?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">If You Invested $1000 In Apple When Steve Jobs Returned To Apple 28 Years Ago, Here&#8217;s How Much You&#8217;d Have</a>



Photo by Younho Choo on Unsplash




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Latest news for Sumitomo Realty & Dev Co (OTC:SURDF) Stock

Tuesday, February 06, 2024