OREANDA-NEWS. Daiwa House Industry Co has completed a subscription for a capital increase through a third-party share allotment to be implemented by Cosmos Initia and, as a result, Cosmos Initia has become a consolidated subsidiary of the Company.  

The Company is examining the effects the transaction will have on its consolidated future results. Any required disclosure will be communicated promptly.

The move by Daiwa House Industry Co. is the latest indication of strong interest in real estate amid rising expectations for the sector, even though the resulting 10% share dilution will have negative implications for the company's stock value, at least in short term.

The Osaka-based firm said Friday it will invest Y400 billion (USD 4 billion) in real estate over the next three business years, funded in part by the share issuance. Purchases will include logistics facilities, such as distribution centers, intended for leasing to companies.

The move comes after government data released in May showed land prices rising in 53% of selected locations in Japan's major cities, marking the first time in five years that prices in a majority of the locations have increased in the quarterly survey. The latest figures covered the quarter through March.

Boosting asset prices has been one of the goals of the prime minister's growth policies, known as "Abenomics," that look to pull Japan out of more than 15 years of price deflation.

Separate from the Y400 billion in real estate outlays, Daiwa said it will invest Y50 billion on M&As, Y50 billion on investment outside Japan and Y150 billion on capital outlays. The company is now putting together a business plan to be unveiled in the autumn.