Basic Structure Of Real Estate Finance In Japan

A. Introduction

The Japanese real estate investment market is continuously expanding despite the spread of COVID-19. In recent years, it has been attracting a great deal of interest from overseas investors, especially due to the weak yen.

The basic investment structures in the Japanese real estate investment market are the GK-TK structure, the TMK structure, and the REIT structure. This article will introduce the GK-TK structure and the TMK structure, which are available for foreign investors who may prefer short-term investments.

B. GK-TK Structure

a. The Basics

In the GK-TK structure, a godo kaisha ("GK") (limited liability company) is used as a special purpose company ("SPC") where investors can invest in by way of tokumei kumiai ("TK") (silent partnership) investments. When a GK is established, an ippan shadan hojin ("ISH") (a general incorporated association) is also established to invest in the GK and hold all its equity. The GK generally acquires a