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Listing

In Rule 1218 of the TSE Securities Listing Regulations, delisting criteria is prescribed for REITs regarding liquidity, financial conditions, etc. In cases where the listing criteria are not met, the relevant issue will be delisted. However, in cases where business of the asset management company, etc. is transferred to another asset management company, etc. and certain conditions are met, it is possible for such issue to continue being listed.
Additionally, in cases where it is likely that there is reason for delisting, in cases where, in addition to designating such REIT as a Security Under Supervision and publicizing such fact, it is decided that such issue shall be delisted, such REIT will be designated as a Security to Be Delisted, and trading will be continued for a certain period (1 month as a general rule).
Specific delisting criteria are as follows (abbreviated for contract-type investment trusts).

Items Delisting Criteria
Investment corporation or Investment management company
Where an investment corporation which is an issuer of a listed real estate investment trust security falls under the following (a) or (b), the Exchange shall delist such listed real estate investment trust security:
  1. Where an issuer of a listed real estate investment trust security falls under any of reasons for dissolution referred to in Article 143 of the Investment Trust Act; or
  2. Where an issuer of a listed real estate investment trust security has fallen into a status where it requires bankruptcy proceedings or rehabilitation proceedings pursuant to laws and regulations or a situation equivalent thereto; or
If the asset management company entrusted with the management of the assets of the investment corporation that is the issuer of the listed real estate investment trust securities falls under any of the following (a) through (e), the listed real estate investment trust securities shall be delisted. However, this does not apply if certain requirements are met.
  1. Where registration of financial instruments business expires pursuant to the provisions of Article 50-2, Paragraph 2 of the Act;
  2. Where registration of financial instruments business is cancelled pursuant to the provisions of Article 52, Paragraph 1 or Article 54 of the Act;
  3. Where an asset management company ceases to be a member of the Investment Trusts Association, Japan (General Incorporated Association);
  4. Where an asset management company ceases to be an asset management company entrusted with business pertaining to management of assets of such investment corporation; or
  5. Where a merger, etc. (excluding cases where the merger, etc. is solely between the asset management company concerned or solely between the asset management company concerned and an asset management company that is currently entrusted with the management of assets of another listed investment corporation) takes place and TSE recognizes that the business operating system pertaining to the management of assets of the investment corporation before the merger, etc. takes place does not substantially continue to exist after the merger, etc.
  6. Where there is a change in the parent company of the asset management company, and TSE recognizes that the business operating system pertaining to the management of assets of the investment corporation prior to the change does not substantially continue to exist after the change occurs.
  7. When the company ceases to engage in the investment management business due to receiving an alteration registration as stipulated in Article 31, Paragraph 4 of the Financial Instruments and Exchange Act.
Security
  1. Where the ratio of the amount of real estate, etc. to the total amount of assets under management, etc. has become less than 70% as of the end of every business period or every computation period pertaining to a listed real estate investment trust security, and does not reach 70% or more within a year;
  2. Where the ratio of the total amount of real estate, etc., real estate-related assets and current assets to the total amount of assets under management, etc. has become less than 95% as of the end of every business period or every computation period pertaining to a listed real estate investment trust security, and does not reach 95% or more within a year;
  3. Where distribution of money or distribution of revenue pertaining to a business period or a computation period has not been made, and distribution of money or distribution of revenue is not made within a year (excluding cases specified by the Enforcement Rules);
  4. Where the number of listed investment units or the number of units of listed beneficiary rights is less than 4,000;
  5. Where the total net assets has become less than 500 million yen as of the end of every business period or every computation period pertaining to a listed real estate investment trust security, and does not reach 500 million yen or more within a year;
  6. Where the total assets have become less than 2.5 billion yen as of the end of every business period or every computation period pertaining to a listed real estate investment trust security, and do not reach 2.5 billion yen or more within a year;
  7. Where trading volume during a year before the end of December of every year is less than 20 units;
  8. Delay in submission of a securities report or an interim report: Where a securities report or an interim report to which an audit report or an interim audit report as in Article 3, Paragraph 1 of the Cabinet Office Ordinance on Audit Certification prepared by two (2) or more certified public accountants or an audit firm is attached is not submitted to the Prime Minister, etc.
  9. Where the following a. or b. is met:
    1. Where there is a false statement in a securities report, etc. pertaining to a listed real estate investment trust security and the Exchange deems that it is clearly difficult to maintain order in the market if the REIT is not delisted immediately; or
    2. Regarding an audit report attached to financial statements, etc. or an interim audit report attached to interim financial statements, etc. pertaining to a listed real estate investment trust security, where certified public accountants or audit firms or those corresponding to these (excluding cases specified by the Enforcement Rules; the same shall apply hereinafter) state an "adverse opinion" or a fact that "opinions are not expressed" in an audit report and an "opinion that the interim financial statements, etc. do not provide useful information" or a fact that "opinions are not expressed" in an interim audit report and, in addition, the Exchange deems that it is clearly difficult to maintain order in the market if the REIT is not delisted immediately;
  10. Where an entity who had entered into a listing agreement pertaining to a listed real estate investment trust security has committed a material breach of the listing agreement as prescribed by the Enforcement Rules where an entity has committed a material breach as to matters taken on oath in the Written Oath submitted pursuant to the provisions of Rule 1204, Paragraph 1, or where an entity that should enter into a listing agreement ceases to be a party to the listing agreement; provided, however, that the same shall not apply to cases where such entity (excluding an investment corporation) falls under any of the proviso of Paragraph 1, Item 1, Sub-item b. , the proviso of Item 2, Sub-item a. of the same paragraph, the proviso of Sub-item b. of the same item or the proviso of Item 3 of the same paragraph;
  11. Concerning to a listed real estate investment trust security, where a refund of investment units requested by an investor or cancellation during a trust agreement period requested by a beneficiary becomes possible due to a change in a rule of an investment corporation or a trust deed of an investment trust;
  12. Where a business period or a computation period becomes less than 6 months due to a change in a rule of an investment corporation or a trust deed of an investment trust;
  13. Where such issue ceases to be handled in the book-entry transfer operation of the designated book-entry transfer institution;
  14. Where a listed real estate investment trust security is an investment security, and where administrative works relating to the investor register have come not to be entrusted to an agent approved by the Exchange as specified by Rule 1205, Item 2, Sub-item m. or it has become certain that it will not be so entrusted;
  15. Where it is found that the issuer of a listed real estate investment trust security has relationships prescribed in the Enforcement Rules as those in which the listed company is involved with anti-social forces, and when the Exchange deems such situation to have considerably damaged investors’ or beneficiaries’ trust in the market;
  16. In addition to each of the preceding items, where the Exchange deems that the delisting of such security is appropriate for the public interest or the protection of investors.